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Budget 2024: Government boosts investment in homebuilding

Budget 2024: Government boosts investment in homebuilding
Christina Hoghton
Written By:
Posted:
30/10/2024
Updated:
30/10/2024

Chancellor Rachel Reeves announced a package of new measures today designed to boost affordable housebuilding and support the commitment to deliver 1.5 million homes.

In her Budget, Reeves announced the following housing market measures to kickstart building and promote stability in the market.

They include:

• A £500 million boost to the Affordable Homes Programme to build up to 5,000 additional affordable homes.
• Future grant investment beyond the current Affordable Homes Programme, to support greater investment in new affordable housing from social housing providers with a focus on delivering homes for social rent.
• A consultation on a new long-term social housing rent settlement of CPI+1% for five years, which will offer long-term certainty for social housing providers, giving the sector the confidence to build tens of thousands of new social homes.
• Reducing discounts on the Right to Buy scheme and enabling councils in England to keep all the receipts generated by sales to protect existing council housing stock and boost council capacity.
• £3 billion of additional support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes, to support the private housing market.
• Planning reforms including £46 million of additional funding to support recruitment and training of 300 graduates and apprentices into local planning authorities, accelerate large sites that are stuck in the system, and boost and upskill local planning authority capacity to deliver the government’s wider reform agenda.
• A £25 million investment in a new joint venture to deliver 3,000 energy-efficient new homes across the country, with a target of 100% of these being affordable. The Budget also confirms £47 million of funding to support the delivery of up to 28,000 homes that would otherwise be stalled due to nutrient neutrality in affected catchments.
• Remediation of unsafe housing in response to the Grenfell Tower fire. Investment in remediation will rise to over £1 billion in 2025-26. This includes new investment to speed up remediation of social housing.

Industry reaction

Paresh Raja, CEO of Market Financial Solutions, said of the measures: “The government’s commitment to house building should stimulate activity across all segments of the housing market, creating a wide range of opportunities for buyers and investors.

“But people can be forgiven for listening to today’s Budget pledges with a degree of scepticism – almost every Budget includes promises to build more homes, but the devil is always in the detail.

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“Reforming the planning system is clearly key, so the government’s focus on this area is welcome, with the rumoured additional planning officers being confirmed by the Chancellor today. It not only needs to be easier for new developments to get the green light, but also for investors and property owners to do more with existing real estate – conversions, renovations and extensions can do a lot to boost the national housing stock.”

Andrew Lloyd, managing director at Search Acumen, added: “Despite the backdrop of tax rises and sombre economic prudence in today’s budget, the Government continues to pledge money for housing, particularly to create new social and affordable homes.

“A reinvigorated approach to one of the UK’s most significant challenges is to be welcomed, but in addition to tackling supply side issues through new funding, we also need to modernise the market, putting in place the digital infrastructure we need to deliver friction-free growth.”