The
Chancellor's Budget has been mainly welcomed by the industry, with
the much-anticipated extra support for housebuilding joined by a number of
other positive plans for the economy and business as a whole.
Philip
Hammond has abolished stamp duty for most first-time buyers in England and
Wales in his Budget.
Mr
Hammond - who has been accused by Eurosceptic MPs of being too pessimistic
about life outside the EU - said £3bn would be spent on Brexit planning, and
that the government would prepare for "every possible outcome".
Key
points include:
- £44bn in overall government
support for housing to meet target of building 300,000 new homes a year by
the middle of the next decade
- Councils given powers to
charge 100% council tax premium on empty properties
- Compulsory purchase of land
banked by developers for financial reasons
- £400m to regenerate housing
estates and £1.1bn to unlock strategic sites for development
- Review into delays in
developments given planning permission being taken forward
- £1.7bn city region transport
fund, to be shared between six regions with elected mayors and other areas
- £2bn for Scottish government,
£1.2bn for Welsh government and £650m for Northern Ireland executive
RIBA
President Ben Derbyshire said: “I’m pleased and relieved that at a time of huge
challenges and after weeks of speculation the Chancellor has recognised the
need for more radical action to address the housing crisis.
"The
RIBA has been calling for the housing borrowing cap to be lifted and for
recognition of the importance of investment in infrastructure in addressing the
housing crisis for many years. I’m pleased that the Government has listened to
the RIBA and other voices."
On
housing he said: “This is a welcome set of announcements, but we will need to
see a greater focus across government to meet the scale of the challenge. The
Chancellor was right to recognise that politicians have not done enough to
tackle the housing crisis over recent decades.
"It
will be years before many of these initiatives lead to new homes being built so
we urge the Chancellor to reconsider some of the restrictions – particularly
the delay in lifting affordable housing borrowing caps for councils until
2019-20.
"The
state of the UK’s overloaded infrastructure remains a huge barrier to growing
the productivity of our economy, but with the right decisions, investment can
help kick-start economic growth and housebuilding. The proposals for new garden
towns and investment in the Cambridge-Oxford-Milton Keynes corridor must be
used as an opportunity to promote good design and high-quality new homes that
act as a beacon to other new developments.
“Like
the Chancellor, architects are planning for a range of possible Brexit
outcomes, but what they really need is certainty from Government. With
the lack of clarity about Britain’s future outside the EU continuing to hang
over the head of the sector – from Europeans worried about whether they will be
able to stay and deciding to leave, to not knowing what our future trade and
customs relationship with the EU will be – the whole sector is unable to plan.
Delivering on the welcome policies that the Chancellor has outlined to solve
the housing crisis and get Britain building will need a confident architecture
sector which can continue to rely on the best available talent from around the
world and which has the certainty it needs to make long-term decisions.”
Brian Berry Chief Executive of the FMB said: “The Government has set itself a new target
of building 300,000 new homes a year by the mid-2020s. And the Chancellor
has put small and medium-sized builders at the heart of ambitious plans to
tackle the growing housing crisis.
"The
Chancellor appears to be putting his money where his mouth is with the
announcement of £44 billion of capital funding, loans and guarantees. In
particular, a further £1.5 billion for the Home Building Fund to be targeted
specifically at SME housebuilders can play a significant role in channelling
crucial funding to this sector.
"A
£630 million fund to prepare small sites for development and proposals to
require councils to deliver more new housing supply from faster-to-build
smaller sites will provide opportunities to boost small scale development.
“A
second major challenge to getting new homes built is the skills crisis we face.
In the long run, the only real solution to chronic skills shortages will be a
major increase in the training of new entrants into our industry.
"We
are therefore pleased to hear the Chancellor has today committed extra
resourcing to training for construction skills. With Brexit round the corner
the next few years will bring unprecedented challenges to the construction
sector. The Government will need to make sure that the sector continues to have
access to skilled EU workers, but we are pleased that the Chancellor has today
listened to the needs of SME builders.”
Jane Forbes, PwC Housing Lead Partner commented: "The commitments of £44bn in capital funding
and loans and to build 300,000 homes each year are extremely welcome and show
the Government recognises that housing and rising homelessness are the most
important non-Brexit issue facing the UK.
“It's
not, however, a new area of focus for the Government and the Chancellor's
comment that 'it takes more than money' to solve our housing challenge reflects
the difficulties the UK has consistently faced in ramping up supply,
irrespective of the capital support available.
"The
reclassification of housing associations to the private sector should improve
the contribution from this element of the industry, although the call to lift
the cap on council borrowing under the Housing Revenue Account by the LGA went
unheeded despite only 1,840 homes being built by local authorities in England
in 2016-17.
"The
challenge now will be to ensure the package of proposals feeds through into a
significant uplift in activity, which poses significant questions in relation
to capacity, skills and infrastructure."
Other
key points include:
- VAT threshold for small
business to remain at £85,000 for two years
- A further £2.3bn allocated
for investment in research and development
- Rises in business rates to be
pegged to CPI measure of inflation, not higher RPI, a cut of £2.3bn
- £30m to develop digital
skills distance learning courses
- £10bn capital investment fund
for hospitals up to 2022
John Newcomb, Chief Executive of the Builders Merchants Federation
said: “The BMF is pleased that
the Chancellor acknowledges the profound need to deliver and build new homes.
"This needs to be an unflinching,
unrelenting determination by government at all levels to narrow the gap between
housing demand and supply. We also want to see the Government press ahead with
its proposals contained in the Housing White Paper, as this will bring a
welcome boost to housebuilders.
“Access
to finance, available land, more SME builders, sclerotic planning approval,
slow build-out rates, over-stretched local authorities, brownfield versus
greenfield, and residents’ resistance, must all be confronted and resolved.
However, we welcome the new money that has been found for the Home Building
Fund, for small sites, and for construction skills. In addition, we are pleased
to see the lifting of the cap on Housing Revenue Accounts for Local Authorities
and the immediate scrappage of stamp duty for many first-time buyers.
“It is clear that we need to build many more homes, but these cannot
be built without the materials and products that BMF members make, stock and
deliver, on a daily basis, to where they are needed. The BMF reminds Mrs May,
Mr Hammond and the Conservatives that it is the customers of builders, plumbers
and timber merchants that build new housing and improve existing homes, not
government ministers.
“However, our members are ready to take on the challenge and provide
the supplies and materials needed to make this happen, if they receive the
necessary support from government by considering all parts of the supply chain
in building new homes.”
Mark
Robinson, Scape Group Chief Executive, comments on today’s Budget: “The only
way to deliver 300,000 homes a year is to get local authorities and housing
associations building as well as the private housebuilders. By lifting the HRA
cap in high demand areas, the Government has finally begun to give councils
better access to finance so that they can borrow to build affordable homes.
“We
need a revolution in council housebuilding, and finance is the main stumbling
block. If given the right resources and powers, local councils can serve as the
engines for housebuilding in their communities.
“The
challenge now on housing is how quickly can they be delivered? Once again
the Chancellor has also set out ambitious plans for further reform of the
planning system, and this will put yet more pressure on local authorities to
deliver permissions. However to achieve this they need to be properly resourced
and will only succeed if the authorities facing the greatest pressure receive
more funding for their planning departments.
“Greater
use of modular and offsite housing solutions will be an essential part of
increasing output, but there was no mention of this today which is a missed
opportunity. New funding for training for the construction sector is a positive
step forward and vital for industry capacity, but the £34m earmarked today is
unlikely to be enough given the sheer scale of the skills crisis in the
industry.”
