The key phrase in this year’s Autumn Statement is “Infrastructure and innovation” with everything revolving around these concepts. We will start at the beginning with Public Borrowing as we all know it is a very HOT topic at the moment, especially considering today’s announcements that:

• Borrowing is predicted to be a staggering £122 billion higher in the period up to 2021 as previously forecast

• Debt will rise to 87.3% of GDP, with a further increase of 2.9% expected in 2017/18 up to £90.2% of GDP

• Public spending will decrease by 5% since 2010, dropping to 40% of GDP, and

• The Office for Budget Responsibility (OBR) is forecasting a steady decrease in borrowing from £68.2 billion this year to £20.7 billion in 2020/21.

The Labour Shadow Chancellor John McDonnell immediately jumped on these figures in his response and condemned the current government for not hitting its targets relating to the deficit, economic growth and debt as well as completing a U-Turn on the introduction of mandatory pay to stay regulations.

The economy also took centre stage with the OBR’s growth predictions upgraded from 2% to 2.1% in 2016, but downgraded to 1.4% from 2.2% in 2017 with growth of 1.7% predicted for 2018, 2.1% in 2019 and 2% in 2020.

The next topic up for discussion was taxation with Hammond congratulating the Conservatives for increasing the living wage to £7.20 which has benefitted 1 million of the lowest earners in society with a further increase up to £7.50 expected in April 2017.

Obviously, our main concern is the announcements relating to housing, and we can confirm that the government will be legislating to ban all up-front fees charged by Letting Agents to tenants. This is in response to numerous campaigns by tenant groups due to spiralling tenant fees whereby some people were having to pay in excess of £500 to cover the costs of referencing and administration. This forced many prospective tenants to take out loans in order to meet the costs placing a great financial burden on them. However, will this really address the issue of affordability in the rental sector in the long-term, as surely Agents will shift the charges to the landlord who will have to increase the rent to cover the costs.

This perspective has been challenged by 24 housing who, following a bit of number crunching have concluded that if the fees were to be transferred to the landlord, their costs would only increase by £25 per month, which equates to a loss in returns of a mere 0.14%. The same company also believes that this change will create 2 distinct groups of landlords. The first being cost-conscious landlords who are likely to explore alternatives to traditional agents such as a ‘do-it-yourself’ approach and the second being time-strapped professional landlords who continue to use Agents due to the all-encompassing service they offer.

DASH’s main concern is that the cost-conscious DIY landlords who cease employing an Agent may not keep up-to-date with the evolving rentals market and the constantly changing legislation, which in turn could lead to landlords not knowing what is required of them.

Mr Hammond also announced a £2.3 billion infrastructure fund to support the provision of 100,000 new homes in high-demand areas. We all know that it is objections relating to infrastructure that can make residential developments unviable, so hopefully this funding stream will unlock developments that would otherwise not come forward.

Further funding of £1.4 billion will be made available in order to develop 40,000 additional affordable homes alongside the relaxing of restrictions on the use of these funds enabling housing providers to deliver a variety of different property types and tenures.

The Chancellor also confirmed the continuation of the governments focus on homeownership via the help to buy ISA and the Equity Loan Scheme which will assist people to save for a deposit and get onto the property ladder.

The final point we would like to highlight is that this will be the last ever Autumn Statement. The Chancellor has decided to abolish the current system and introduce an Autumn Budget where proposed changes can be announced and be ready for implementation the following financial year. In Spring there will only be a statement released in response to the report published by the OBR.

As the government clarifies these new policies DASH will keep you up-to-date.

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