Spring Budget: £12bn set aside for affordable homes programme
The March 2020 Budget laid out a barrage of funding, including setting aside £12.2bn for the Affordable Homes Programme.
Additionally, £400m will go towards Mayoral Combined Authorities and local areas to establish housing on brownfield land across the country.
Allocations for the Housing Infrastructure Fund were also noted to the tune of £1.1bn for nine different areas including Manchester, South Sunderland and South Lancaster.
This infrastructure funding will be used to build 70,000 new homes in high demand areas.
Looking to those without a home, £650m will be provided to help rough sleepers into accommodation.
The Budget also outlined that a Stamp Duty surcharge of 2% for none UK property investors will be enforced.
On the topic of building safety, the chancellor announced that a Grenfell building safety fund worth £1bn would be released. The funds will help the removal of cladding from buildings over 18 meters.
Furthermore the Secretary of State for Housing, Communities and Local Government will set out comprehensive reforms to bring the planning system into the 21st century, followed by a Planning White Paper in the spring.
The Budget also outlined that where LPAs fail to meet their local housing need, consequences will be enforced including a stricter approach taken to the release of land for development and greater government intervention.
In addition, the government intends to identify long-term reforms to the planning system, rethinking planning from first principles, to assist the system in providing more certainty to the public, LPAs and developers.
Nick Sanderson, chief executive at Audley Group, said: “The Budget has again focused on building new houses.
“Yet another missed opportunity to support specialist housing rather than indiscriminate building.
“We don’t need 70,000 new homes. We need to free up existing housing stock to bring movement to the housing market and provide more people with homes that are suitable to their current needs.
“The focus needs to be on long-term solutions rather than headline grabbing numbers.”
Jeremy Leaf, north London estate agent and former RICS residential chairman, added: “The housing market recovery has been hit by a double whammy of the virus and falling markets. The recent rise in sales, prices and mortgage approval numbers was unlikely to be maintained even by a giveaway Budget and cuts in already rock-bottom interest rates.
‘Our viewings are down by about 25% on what we might expect at this time of year although there is no real sign of previously-agreed sales collapsing although mortgage deals may need to be renegotiated.
“The extension of the affordable homes programme, lower lending rates for social housing and release of monies from the housing infrastructure fund are all welcome but it is disappointing that there was no action to improve the relatively low level of transactions.
“In particular, apart from the 2% surcharge on non-UK property buyers from next year, there was no action on stamp duty.
“An opportunity was missed to improve accessibility to the market for first-time buyers and downsizers who are causing a log jam at the top and bottom of the market.
“This would have improved activity, which is good for the whole economy.
“Clearly, housing is not up there in terms of priorities for the chancellor at the present time.
“Hopefully there will be better news in the housing white paper out tomorrow with regards to planning.”
Nick Leeming, chairman of Jackson-Stops, said: “Today’s Budget is in many ways somewhat of an ‘emergency budget’ to mitigate the economic impact caused by Covid-19.
“As a result, it is not business as normal in Number 11 and we welcome the range of measures announced to help support businesses in these more uncertain economic times and Government’s commitment to providing a £30bn stimulus to support the economy through Coronavirus.
“It is disappointing that the government has failed to provide the housing market with a long anticipated reform to stamp duty for UK residents.
“This is aggravated by the overseas buyer tax, which could now see foreign purchasers pay up to 17% in stamp duty from 2021.
“Reducing the burden of stamp duty across the board would have provided the market with further momentum following the Boris bounce. Despite this, the higher end of the market may now see movement as foreign buyers look to secure deals ahead of this deadline.
“The government has teased the industry and home buyers alike with hopes of a future reform to stamp duty, but we don’t expect this to put the brakes on people’s current home buying decisions – particularly now borrowing costs are back down to the lowest level in history following the Bank of England’s cut to interest rates.
“Since Boris and the Conservative party won the General Election, our branches registered, on average, a 10% increase in new applicants on the year to January, with new instructions in the month also up by 26% compared to January 2019 figures.
“Despite this, there are some pockets of the market that just aren’t budging. A targeted relief for homeowners who live in properties that are larger than their needs would help encourage these owners to downsize and free up these homes for families to provide further fluidity in the market.”