Talked up as a Budget for the housing sector, the Chancellor of the Exchequer demonstrated in his second Budget of the year that the government is ready to play a more interventionist role in the property market.
A range of measures was announced, which will be welcomed by aspiring homeowners, housebuilders and local authorities.
Here’s what was in Philip Hammond’s red box, and what it means for our borrowers and investors:
Stamp duty cut
Industry campaigns to rethink stamp duty land tax haven’t fallen on deaf ear. The government listened and announced it will scrap stamp duty altogether for first time buyers on homes worth less than £300,000 and for the first £300,000 on their purchases up to £500,000. A measure like this will increase property transactions, improve market liquidity and will be helpful in restoring confidence to property investors. It is worth noting that the Office for Budget Responsibility forecasts that property prices will experience a boost as this policy sparks buyer demand.
Support for contractors
Construction skills got a boost too. £34 million will go towards teaching construction skills like bricklaying and plastering. As the Chancellor argued, in order to turn planning permissions into housing completions, we have to have a skilled workforce that’s ready to deliver.
More money to build homes
This is backed by a package of £15.3bn in new financial support for house building over the next five years, including a further £1.5bn for Homes England (formerly the Homes and Communities Agency) to specifically support small-scale developers. This is an extension of the Homebuilders Fund launched last November. We want to see government updating industry soon on how much and how quickly this funding is deployed to SMEs.
Working with lenders, like us
To deliver 300,000 new homes each year by the mid-2020s, Treasury ministers will explore options with lenders like us to create £8bn worth of new guarantees to support housebuilding.
The Chancellor has put more power in the hands of local authorities to improve housing delivery too. The government will set up a review panel to explain the significant gap between housing completions and the amount of land allocated or permissioned, and make recommendations for closing it.
To bring empty homes back into use, local authorities will be able to increase the council tax premium from 50% to 100%. At the same time, local government could be expected to bring forward 20% of their housing supply as small sites.