What does the Budget mean for UK's housing crisis?
The National Federation of Builders and the House Builders Association analyse the welcomed and 'disappointing' announcements in yesterday's emergency budget.
With planning and building mentioned over fifty times, one would expect the summer Budget to outline the Government’s plans to address the housing supply shortfall. Unfortunately, this budget resembled a showpiece for Osborne to plan and build on past austerity success.
On 6 July, Housing Minister Brandon Lewis announced the Housing Growth Partnership (HGP) to help SME house builders increase the rate of house building. With this measure, it appeared that SMEs were being given the opportunity to compete for work on a level playing field. It became soon apparent, as the chancellor was unveiling his plans, that house building was not even on this Budget’s agenda. The house building sector needs urgent changes in: planning, land release, regulation stability, site identification and funding. And yet, with none of these issues surfacing there was very little that would affect house builders. Greater Manchester will however have new powers in land and planning, and the annual investment allowance (AIA) will decrease to £200,000 rather than £25,000 as originally expected.
The NFB welcomes the emphasis on improving infrastructure with a £17.8 million fund for local transport projects, accompanied by a £20 million New Station Fund, as well as the announcement that proceeds from vehicle excise duty will begin funding improvements to our road network. We hope that the latter measure may contribute to ensure that community infrastructure levies are applied more fairly, and not be treated as mere guarantees of contribution from developers.
The HBA is disappointed by the low focus on house building the Budget. The Government may be laying foundations slowly to ensure place-making, but with so little conversation around house building and planning, there are concerns that demand will only increase further and supply will continue to stagnate.
The HBA hopes that when the infrastructure foundations are finally laid, government policy will prioritise long-term supply over demand.
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