Chancellor, Jeremy Hunt, has today delivered his budget, setting out the government’s plans for the next financial year.
Much was expected with an election thought be looming and the chancellor’s statement saw him set out a range of tax cuts. The National Insurance contribution rate will be cut from 10% to 8%, the higher rate of property capital gains tax will be reduced from 28% to 24% and the government will abolish non-dom tax status and replace it with a “modern, simpler and fairer” system from April 2025.
There was little for the housing industry to get its teeth into, with no inclusion of Stamp Duty reform or the introduction of an incentive to support first-time buyers.
Here’s how the industry reacted to the Budget statement:
Marc Vlessing, founder and chief executive of Pocket Living, said: “The rapidly emerging consensus is that we need to deliver 500,000 new homes per year, yet we can barely manage 200,000 at present. We need action to save an SME housebuilding sector in crisis, yet despite intense campaigning by the sector we haven’t received a penny of support in this budget.”
“This was a real chance, perhaps the chancellor’s last, to unlock 1.6 million homes on brownfield sites through a fairer and faster planning system, support SMEs to rapidly increase housing delivery, introduce real measures to get those waiting hundreds of thousands of people onto the housing ladder, or use housing as a means to drive significant productivity gains to support key industrial and business sectors. The other major question is what has happened to Michael Gove’s big housing moment. Did it get stuck in planning or was it simply unviable to deliver?”
Cormac Henderson, co-founder and executive chairman at Spring, commented: “The Chancellor has missed a huge opportunity to stimulate the entire housing market by failing to implement a Stamp Duty break for \’last-time buyers\’, many of which feel trapped and put off by the costs of moving – with potential downsizers accounting for circa 3 million properties in the UK.”
“By incentivising downsizers who need to ‘rightsize’, this move would also bring benefits to the entire market as it is estimated that each top-of-chain home sale facilitates about 2.7 other sales, therefore creating a win-win solution at all levels. By freeing up the logjam at the top, everyone can benefit including first-time buyers and families who will have more stock to choose from as people move up the ladder.”
Olivia Harris, CEX of Dolphin Living, said: “The chancellor is absolutely correct to focus on improving the UK’s low levels of productivity given the impact that is having on economic growth. While the measures in the budget will go some way to addressing this, we feel that a huge opportunity was missed to tackle one of the key productivity challenges the country faces. That challenge, the need for affordable, stable housing, also links strongly with a second crisis – the cost of living crisis. Addressing the lack of affordable housing, particularly for workers on median incomes would also alleviate the impact of the cost of living crisis.”
Mike Burton, land director at Metis Homes, said: “I was hopeful that we might finally get a budget that truly stimulates the housing sector – however, all in all, it was rather disappointing and a repeat of the last few budget announcements, which did very little for the housing industry as a whole.”
“The lack of any incentive for those trying to get onto the housing ladder is a great loss. That is the area we see as most challenging in the housebuilding industry, and most likely to hamper growth. Bringing back Help to Buy, would have been a sensible step, as this was an initiative that previously worked and helped thousands to take that first step.”
“Whilst stimulating the transactional part of our sector would generate the most positive news and momentum, there are several other key areas that Jeremy Hunt could have provided real assistance with in this budget. Further investment in the planning system, including the provision of more funding for planning departments – this will now only be under more pressure as the planning process becomes more and more complex.”
Simon Vernon-Harcourt, design and planning director at City & Country, commented: “It is disappointing to see no mention by the government to encourage upgrading of old homes to higher energy efficiency, or the reuse of historic buildings. The UK has among the oldest domestic housing in Europe, but these homes are not energy efficient and it feels like the government has no foot on the pedal when it comes to supporting the property industry by retrofitting our vast housing stock and rich heritage assets.”
Chris Gardner, CEO at residential development finance lender, Atelier, commented: “What was delivered in today’s Budget does nothing to help unlock the current housing market inertia. We had low expectations for what this Budget would deliver, but, we hoped, as did most in the property sector, that there would be a catalyst for change, to get the market moving – something to improve sentiment after protracted period of inertia.\”
\”Nothing was done to address the actual issues facing the sector. A lack of delivery and affordability has plagued the market for years, and without intervention we face a future that deprives the young of homeownership.\”
\”On the other end of the spectrum, overregulation and planning bureaucracy has hamstrung housebuilders by making it economically unfeasible to build houses in many parts of the country. SME developers play a vital role in the delivery of homes and are also being the hardest hit by overburdensome regulation. SME developers needed support today and were left short-changed.”
