As with most Budgets, today’s budget has been heavily previewed - so it should come no surprise that one of the main focus areas has been to try to “fix” the UK housing market.
The main headlines
At least £44 billion will be invested over 5 years, with an objective of building 300,000 net additional homes per year.
New funds will be made available to support home builders and SMEs in particular. These include:
- A new £630 million small sites fund will be launched
- The “Housing Infrastructure Fund” will be more than doubled with an budget increase of £2.7 billion
- The “Estate Regeneration Fund” will be increased by more than £400 million
- £1.1 million will be added to “Strategic Funds”
- £8 billion will be used to fund financial guarantees, particularly to support the purpose built private rented sector
- £34 million will be spent to improve construction skills
- £1.7 billion more for the “Transforming Cities” fund
Stamp duty abolished for some
The government has bowed down to mounting pressure and is giving younger voters a helping hand by abolishing stamp duty for some first-time buyers.
Stamp duty will be abolished for first time buyer purchases of up to £300,000. Additional assistance will be provided for those purchasing in areas where prices are very high. Stamp duty will be waived on the first £300,000 of properties up to £500,000 in these areas.
Green belt and planning reform
Hammond has protected the green belt and is instead focusing on better use of urban environments. There will be a focus on high quality, high density homes in city centres and around major transport hubs.
Planning rules will be relaxed to ensure that councils in high demand areas permit more homes for local first time buyers and affordable-home renters.
There will also be an urgent review to better understand the gap between granted planning permissions and new build starts. If it is found that developers are delaying starts for commercial reasons direct intervention, incentivisation and compulsory purchases will be considered.
Borrowing rules for councils
The Housing Revenue Account Borrowing cap meant that local councils have not been permitted to borrow to build homes. These debt limiting rules will be relaxed to allow councils in the high demand areas such as London area to have more freedom to invest in affordable new council housing.
Help to buy
The government will put another £10 billion into the Help to Buy scheme, which provides first-time buyers with cash to buy a new-build home.
To incentivise the use existing properties there will be a 100% council tax premium for empty properties.
New projects and agencies
The “Homes and communities agency” will be expanded to form “New Homes England”, with a remit to deliver the generation of new homes. Their powers will include the ability to make compulsory purchases.
New Town Development Corporations will be used to kick-start the development of five new garden towns.
The Cambridge / Milton Keynes corridor will see 1 million new homes by 2050, with 100,000 new homes planned by 2031.
We very much support the government’s intention to build more homes and would welcome their commitment to work with everyone concerned to understand how best to streamline processes.