With Rachel Reeves’ first nine months as chancellor not being plain sailing, Mark White, managing director of Hampshire-based housebuilder, Bargate Homes and chair of the Future Homes Hub’s SME liaison group, is urging the Treasury to use its second fiscal event to stimulate housing demand.
With housing and planning reform having been a key focus of Labour’s election campaign, the recent changes introduced by MHCLG show the government’s intent to deliver on its manifesto promises. However, in Reeves’ quest for economic stability, the economy has flatlined. April will bring much-dreaded hikes in Stamp Duty, employer National Insurance contributions, energy price rises in excess of inflation, and a raft of spending cuts.
With no positive announcements trailed in advance of Wednesday’s Spring Statement, the Chancellor needs to be creative and should look to introduce some easy wins. With the NPPF and Planning and Infrastructure Bill recently unveiled, the timing is ideal for Reeves to recognise the vital role housing can play in the health and growth of the UK’s economy. Positive planning changes must now be met with demand-side assistance.
For the first time since the 1960s, there is no home ownership support available to broaden access to the housing ladder for those without a large deposit. Yet, there is a plethora of measures the Chancellor could announce to stimulate the housing market which would either be cost-neutral or have a cash-generative impact.
Introduced by the Conservatives in 2013, Help to Buy was transformative for the new homes market and resulted in a cash surplus for the Treasury. I urge the Labour administration to announce a similar initiative, as it would have an immediate impact on the market and help to put MHCLG’s bold reforms into action. Housebuilders would be in a position to increase buildout rates and thousands more vying first-time buyers would be able to leave the rental trap behind and become homeowners.
From autumn 2026, the Building Safety Levy will see a new charge applied to every new build home. The significant per plot cost will be charged on a per sq metre basis – varying by region – equating to £3,000 – £3,500 for an average three-bedroom house. Prior to the first plot being signed off by Building Control, the levy charge for the entire development will need to be paid in full. Developers and the HBF have warned the government that this will bring about an alarming reduction in the number of new homes to be delivered from next year onwards and is at total odds with the stimulus from MHCLG.
Putting aside the viability issues with increasing the taxation on housebuilding, there are other helpful incentives that could bring about increased market activity. To reward the early adopters of the Future Homes Standard, the Chancellor should mitigate the 1st April Stamp Duty increases with a meaningful rebate for homes rated EPC-A. This would increase footfall and sales activity at exemplary developments, and could deliver significant savings to new homebuyers.
The Future Homes Hub’s SME liaison group is also calling for real data to be collected to analyse the energy and carbon use in new and old homes. Those who keep their energy and carbon usage below a calculated average should be rewarded. As with Help to Buy, I’ve long been an advocate for the introduction of government subsidies to boost the take-up of Green Mortgages, which are only available for homes rated EPC-A or B.
It is also time for the ISA limit to be increased so that it’s possible to save for a deposit in a shorter timescale. The Treasury should accelerate the ability to use ISAs as a mechanism to access the housing ladder.
This week’s Spring Statement offers the opportunity to boost demand for new homes to support Labour’s growth plan and housing ambitions. The whole industry and the public at large could become increasingly disillusioned if there is nothing positive announced.
