NAEA Propertymark’s Commercial Advisory Panel has expressed concerns about the effect that Chancellor Rachel Reeves’ increases to employers’ National Insurance contributions and National Living Wage hikes could have on property agents’ wage bills and income streams.

They also highlighted that many sectors such as hospitality and leisure could be hit even harder regarding the recruitment of and overall pay of staff, with consumers paying the price via increased charges.

Furthermore, regarding Stamp Duty Land Tax, they are worried that an increase in the surcharge on second homes and buy-to-let properties will result in a reduction of tax receipts for the UK Government as less people will then want to buy a new home.

However, they did welcome the UK Government’s £5 billion investment in housing and the release of capital receipts from Right to Buy to help local authorities invest in housing stock, though they asked for more detail here.

The National Living Wage for people aged 21 or older will increase by 6.7 per cent from £11.44 an hour to £12.21 from next April.  

For people aged between 18- and 20-years old, it will be boosted from £8.60 to £10 an hour. 

The largest pay rise will go to apprentices, with hourly pay being boosted from £6.40 to £7.55. 

Ms Reeves raised employer contributions to National Insurance by approximately 1.2 percentage points from 13 to 15 per cent from April 2025. The threshold at which they start paying this tax will also decrease from £9,100 to £5,000.  

There will also be a two per cent raise on the Higher Rates for Additional Dwellings on second homes and buy-to-let residential properties, which will now increase from three per cent to five per cent from 31 October 2024.

The Chancellor intends to invest £5 billion to implement the UK Government’s housing plan.  
  
There will be a reduction in Right to Buy discounts so that local authorities can retain receipts from any social house sales and reallocate that money into boosting housing supply.  
 
Finally, there will also be a social housing rent settlement of CPI plus 1 per cent for the next five years.  

Michael Sears, NAEA Propertymark Commercial Advisory Panel Member, said:

“As an employer myself, these measures will mean that we will think twice in the short term about wage increases and increasing our workforce. Any addition to the workforce would have to be justified in means by the potential of income from growth, and that is very uncertain in the short term.

“More than any other sectors, leisure and hospitality will be hit harder. Given the perilous state many in this sector find themselves in already, it will be even harder now to source, recruit and pay staff. Expect dining out to become an even greater cost and for many places to reduce their opening days.

“Regarding the increase to the Stamp Duty surcharge, the downside to this measure from the taxman’s point of view must be the loss of Stamp Duty receipts.

“The release of capital receipts from Right to Buy will help local authorities to reinvest in housing stock – the detail of this will be important.”