2023 UK Autumn Statement - Key Highlights for Property Investors

In the highly anticipated 2023 UK Autumn Statement, Chancellor Jeremy Hunt presented a comprehensive economic strategy that outlines the trajectory for the nation's future, with a special emphasis on property investment. Here's a breakdown of the key highlights articulated during this announcement.

‍

Economic Growth:

Chancellor Hunt initiated the proceedings by acknowledging the projections of the Office for Budget Responsibility, forecasting a 0.6% economic growth for the current year and a subsequent uptick to 0.7% in the following year. Official figures underscored a robust 1.8% increase in the economy relative to pre-Covid-19 levels.

The spending watchdog anticipates a decline in inflation to 2.8% by the end of 2024, marking a significant reduction from the previous year's 11.1%. Further optimism prevails as a drop to the 2% target in 2025 is envisioned. Future GDP projections outline a strategic growth plan with 1.4% in 2025, 1.9% in 2026, 2% in 2027, and 1.7% in 2028.

A pivotal aspect of the economic plan involves a concerted effort to reduce borrowing, aiming for 4.5% of GDP in 2023/24, with a projected decrease to 1.1% by 2028/29, according to the OBR.

‍

Investment & Infrastructure Initiatives:

To invigorate the economy, enhance productivity, and stimulate property investment, Chancellor Hunt announced an annual injection of £20 billion. An instrumental part of this initiative is the introduction of "Full Expensing: Invest for Less," a permanent £11 billion tax cut annually, expected to catalyze a £14 billion increase in business and property investment throughout the forecast period.

The UK's commitment to fostering a favorable business environment, including property investment, is reinforced by maintaining the lowest headline corporation tax rate in the G7 and the most generous capital allowances among major advanced economies. The implementation of the super deduction in 2021 has propelled the UK to experience the fastest growth in investment, including property investment, among G7 nations.

Aligning with the goal of attracting foreign direct investment, the government has endorsed Lord Harrington's recommendations, allocating additional resources to the Office for Investment to support strategically important investors. Furthermore, the establishment of three advanced manufacturing Investment Zones in Greater Manchester, East Midlands, and West Midlands is anticipated to generate 65,000 jobs and £3.4 billion in private investment over the next decade.

In a move to promote regional development and boost property investment, agreements on four new devolution deals across England have been reached, aiming to fulfill the Prime Minister's commitment to leveling up.

‍

Housing Market Update:

Chancellor Hunt unveiled a £110 million allocation for the current year and the next to implement "high-quality nutrient mitigation schemes," with the goal of unlocking 40,000 homes, further contributing to the landscape of property investment.

‍

Now is the perfect time to explore the exciting possibilities that property investment holds. Feel free to get in touch with us today, and we can have a conversation about how you can make the most of the new changes brought about by the Autumn Statement.

‍