Yesterday’s Budget was a bit thin when it came to housing policy. There were a few key messages on funding - some of which had already been reported - but nothing to really shake up the sector. In total the Chancellor is pledging to spend “almost £24 billion” on housing between now and 2024/25. There is £1.8bn to encourage housing developments on brownfield sites and the previously announced £11.5bn will go towards building 180,000 new affordable homes.
As expected, the Residential Property Developer Tax was confirmed with the proceeds to go towards the £5bn that the Government has promised to tackle the cladding crisis. The tax is expected to raise £200m–£250m a year which will help to fill the hole in the Government’s coffers left by Covid. But we know it’s not enough and it is unlikely to prove popular with the biggest housebuilders who are to be hit with the 4% levy once they make an annual profit of more than £25m..
Hamptons research department said today that "as far as big policy changes in the housing market are concerned, no news could be construed as good news". We're not so sure. There will be no change to capital gains tax for the time being – which is a relief for landlords. But there was new funding to help the court system catch up and cope with the ever-increasing number of possession hearings and nothing in the Budget for beleaguered first time buyers going forward. With the housing market overheating and demand outstripping supply in the rental market, it seems that despite all the talk of levelling up, the housing crisis will continue to be left to the market and largely ignored.
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