Budget 2021: Housing market announcements
Chancellor Rishi Sunak delivered his Budget to the House of Commons today.
He announced a boost to public spending and a cut on alcohol duties, but his speech was light on housing content.
Some industry professionals were glad to see no major changes to CGT, others disappointed that there was no extension to the Stamp Duty holiday. But overall, many housing experts felt a mix of anticlimax and relief that there were no major new announcements to chew over.
Iain McKenzie, CEO of The Guild of Property Professionals, said: “The Budget was notably lacking in any further provisions to the property market, with the Chancellor likely having one eye on the sales boom ignited by the stamp duty holiday.
“The continued rise in house prices and high demand for properties will encourage the economy to grow, and these factors will have influenced the Chancellor’s thinking.”
There were a handful of housing announcements, and we’ve rounded them up below.
The government said that in order to ‘turn Generation Rent into Generation Buy’, it will build on existing commitments, confirming a nearly £24 billion multi-year settlement for housing.
The settlement includes some new announcements and confirmation of others we already know about:
1. £1.8bn on converting brownfield land to deliver housing
The money will be used to bring 1,500 hectares of brownfield land into use for the building of 160,000 homes in England.
James Thomson, CEO of MJ Gleeson said: “Building low-cost homes must be a priority as a means to levelling up and transforming lives and communities. While we welcome further investment in brownfield sites, it is vital that this support is targeted at deprived areas in need of regeneration.”
Hugh Gibbs, co-founder of SearchLand, added: “This country doesn’t have enough homes. The UK’s affordability crisis has been building for decades and there is an urgent need to deliver more high-quality affordable housing, but the pace of construction is failing to meet demand.
“As such, the Chancellor’s funding pledge to encourage brownfield residential redevelopment across over 100 areas is a positive step in the right direction, but there needs to be a concerted effort from the government to ensure the homes are fit for purpose and affordable for those in need.”
2. £11.5 billion investment through the Affordable Homes Programme
The government said this money will deliver up to 180,000 affordable homes and 65% of the funding will be for homes outside London.
Nick Leeming, chairman of Jackson-Stops, said: “It is positive that the Government has reinforced its commitment to unlocking new homes across the nation, and in turn hopefully contributing and encouraging fluidity and affordability across the buying lifecycle.”
McKenzie added: “The pledged investment for building new homes shows that they are acknowledging the shortage of stock available to buy.”
3. Property developer tax to pay for cladding removal
The government confirmed the commitment to grant funding of over £5 billion to remove unsafe cladding
from the highest-risk buildings. This will be partly funded by a residential property developers’ tax, at 4% of profits over £25 million.
Martijn van der Heijden, CFO at Habito says: “It is absolutely critical that the Government sets aside serious funding to resolve the terrible issue of the cladding crisis. Not least for the mental and financial health of the homeowners impacted, but also to get this part of the property market transacting again. There are hundreds of thousands of homeowners who have lived under threat of bankruptcy, trapped in flats that are unsellable and unmortgageable.
“The £5bn that’s been earmarked to be spent on removing unsafe cladding from the highest risk buildings is not new news, but goes some way to financing a solution for the many impacted.”
4. £65 million investment to improve the planning regime
The new investment will go towards a new digital system which will ensure more certainty and better outcomes for the environment, growth and quality of design.
Gibbs added: “While we welcome the Chancellor’s commitment to increase housebuilding, what’s needed now, more than ever, is a seismic shift in our outdated and ineffective planning system, which continues to be a threat to housebuilders’ ability to deliver new homes.
“A £65 million funding pledge to help digitise the planning system might seem like a positive step, but given the scale and complexity of the task, as well as this Government’s track record with digitisation projects, is enough emphasis being placed on this issue given its immense importance?”