Philip Hammond’s eagerly awaited 2018 Autumn Budget was announced yesterday, and there stands to be some big beneficiaries. But how do investors and house-buyers fare? This was Philip Hammond’s third budget as chancellor and the main points that reached the headlines were the income tax cuts and who they would benefit. However, the Budget addresses much more than how much extra people will take home in their pocket after income tax though, with investors and home owners also being impacted. The personal allowance threshold is due to increase to 12,500 in 2019, a year earlier than expected. This means that overseas investors will be able to take home more of their rental income. For example, units in Allen Street, a Sheffield student accommodation investment have a typical purchase price of 67,500 and 10% net yields would generate 13,500 per annum. Overseas investor could purchase two units and only pay 200 in income tax if it is their only income in the UK. Purchase price: 135,000 (combined) Income per annum: 10% Net @ 13,500 Personal Allowance: 12,500 Outside allowance taxed at 20% = 200 The good news is that there is no change to commercial property stamp duty which means that care home and student properties could still be acquired with no stamp duty costs. Also, there is good news for first time buyers who are purchasing shared ownership properties. They will be exempt from stamp duty on purchases up to 500,000 and this will be implemented retrospectively to purchases made from November 2017. The extension of higher level, would make someone earning 37,500 six hundred pounds better off (3,000 X20%). This could help in small way reduce the affordability of property with London prices falling since the introduction of second home stamp duty in on the 1st April 2016. Those saving for retirement will not find any benefit from the new budget as there was no changes in tax relief rates or tax-free cash. It means that it would be wise for those who are nearing retirement to utilise tax relievable options whilst they are still available in terms of gifting money or investing. The Budget also fell short in terms of housing, with many experts saying that Hammond needed a far more ambitious plan to achieve any kind of success in combating the housing crisis. The government announced that it was looking into measures that will simplify the conversion of commercial buildings to residential property which will provide more accommodation options, and of course there will be an effort to build more houses but that does not go far enough to address the shortage. The above announcements would imply that there is still scope for profitability in property investment. Although the government will implement some measures to address the housing shortage, these would not nearly go far enough to tackle the issue. The extension of the Help to Buy scheme to 2023 will help some purchase their own homes, but currently it has only assisted 420,000 households, which compared to the country’s 5 million renters is a small number. The huge pool of potential tenants will still be an attractive fundamental for existing and would-be landlords, and in cities such as Manchester or Birmingham which have a high young population, investors can achieve excellent yields with buy to let investments. Contact One Touch Property today to learn more about potential investment property options or download our buy-to-let guide.