On Wednesday 28th October, the Chancellor delivered the Autumn Budget, outlining the government’s spending plans for the foreseeable future. This was the first major fiscal moment since Andy Burnham became Prime Minister. Read on for the announcements that will impact private renters.
Energy bill support
In his speech, Healey recognised that households desperately need some breathing space from soaring energy bills, announcing three headline measures to help households cope with rising energy costs.
The standing charge we currently pay on household gas bills will be removed in 2027. The government estimates 60% of households could save an average of £45 a year. However, if you use more gas than average, perhaps if you’re one of the 578,000 private renter households in a home with an energy efficiency rating of E-G, you may end up paying more as the cost will be moved onto the gas unit rate.
Secondly, 20 million households in council tax bands A – D will be eligible for a £100 one off payment this winter to help with bills (you can find your Council Tax band on the government website). Typically direct money off energy bills has been limited to households who are eligible for the Warm Homes Discount. This expansion will see millions more private renters receive support this winter, something our Chief Executive Holly Williamson recently called for in Labour List.
Finally, the temporary electricity VAT cut is set to continue to July 2027, saving an estimated £45 a year for the average household.
With private renters more likely than people in other tenures to experience fuel poverty, additional support around energy bills is welcome. But the Chancellor has faced criticism over the energy support scheme being poorly targeted, with over 800,000 lower income families set to miss out on the £100 payment, according to analysis by Policy in Practice.
Additionally, energy bills are forecast to rise by around £300 a year over the course of 2027, more than cancelling out the savings outlined in the budget.
Local Housing Allowance
Despite strong campaigning from housing charities, the Chancellor maintained the freeze of Local Housing Allowance (LHA). LHA decides how much people receiving Housing Benefit or Universal Credit can get towards their rent, and this has been frozen since April 2024. Since then, private rents have increased by over 23%, with less than 3% of advertised lets in Britain currently affordable for people claiming LHA.
Holly labelled the continued freeze “hugely disappointing”, while saying the decision “brings into question the government’s goal of ending rough sleeping, as it will mean there are very few affordable long-term homes for people currently sleeping rough.”
Your First Home
During the Labour Party Conference, the Government announced a new scheme called ‘Your First Home’ aimed to help people buy a home who ‘don’t have access to the bank of Mum and Dad.’ The Chancellor then gave further details on how the scheme would work in his budget speech, including announcing £4.7 billion of funding for it.
The scheme will only apply to new build homes and be accessible from Spring 2027. Those taking part, who buy a home from a participating developer, will be offered a government-backed “equity loan” worth 20% of the purchase price. This will be interest-free for the first five years. Meanwhile, the minimum deposit the buyer will have to put down will be just 2.5% (the maximum deposit will be 15%). That means buyers will only need to take out a standard repayment mortgage for 77.5% of the property’s value.
There will be a household income cap to exclude those on bigger salaries from taking part. Buyers will need to have a total annual household income of £110,000 or less outside London, or £140,000 or less within London. There will also be caps on the value of the home people can buy.
The scheme will likely help some renters who are struggling to save for a deposit to buy their own home, and predominantly in parts of the country where house prices are relatively low, allowing for low mortgage payments compared to the rent. This will help reduce competition for rented homes, with Zoopla recently blaming rising rents on people not being able to afford to buy a home. However, analysis from the Resolution Foundation estimated three-quarters of the private renter households with the resources to access Your First Home are in the top half of the income spectrum.
Even if you could afford to use the scheme, there are downsides. Because high interest rates are weighing down house prices, people who put down a small deposit are at high risk of negative equity if house prices come down, making it more difficult to move home.
