Following the plethora of housing pledges announced in today’s Budget, we’ve rounded up initial views from some of our clients:
From Richie Tramontana, Director of Red Property Partnership
Whilst Philip Hammond’s Stamp Duty plan announced in today’s Budget is good news for first time buyers, it’s a shame that he didn’t place further emphasis on the rental market when approx. 5 million households in the UK are currently renting. The extra 3% stamp duty on second home purchases has killed the market for small-time buy-to-let investors and could mean that rental stock is starved in the short-term, pushing up prices for those who can’t afford to purchase or choose to rent for lifestyle reasons.
It’s encouraging that the Chancellor wants to introduce planning reforms to make better use of underused land in urban areas, rather than build on greenbelt land. There’s plenty of opportunity to build upwards, not just outwards, and for developers to change their design strategies, for example building townhouses and apartments as opposed to large family houses.
From Adam Challis, Head of Residential Research, JLL
300,000 Homes Target
“This Government has recognised that empty housing targets will no longer wash with the voting public.
“300,000 homes per year is very ambitious, but delivery volumes are up by 74% since 2013. At this rate Government could achieve its target by 2020, in time for the next general election.
“However, there is a looming labour crisis that will undermine this target if it is not addressed. The shortfall of workers means a modernisation towards digital construction techniques is badly needed. Modular construction can also make an important contribution to quality improvements alongside higher volumes, crucial to restoring public confidence in the industry.
“Delivery growth rates have been impressive. But as Grenfell reminds us, supply volumes can’t come at the expense of quality.”
“Government is offering a game-changing level of support for the sector through capital funding and loan guarantees. £44 billion will trigger a wave of new investment from the private sector to drive supply.”
“The HCA has re-positioned as a more proactive Government department and this investment is a smart way to balance fiscal prudence with providing real value for the industry.
“The SME community needs a hand up, not a handout. At the same time, Government has recognised that building new homes is not a level playing field. In order to get more small developers building, it is providing a lot of direct support that will reduce risks for this group.
“Housing delivery from SMEs more than halved in the global recession and has struggled to recover ever since. Today’s announcement will make this group far more competitive in the land market and will increase the pace of delivery.”
“Use it or lose it’ planning pressures will not support housing supply. There is little evidence of land banking, and these rules will force housebuilders to hold fewer sites on their own books.
“A greater use of option agreements and land promotion has the potential to create upward pressure on land prices, ultimately feeding through to sales prices.
“A genuine debate on development in appropriate greenfield locations is long overdue. Government should focus on locations where local infrastructure can support new development, or where it can provide this investment to enhance the quality of public services in local communities.
“A new wave of urban extensions is a necessary part of the mix in delivering the UK’s housing ambitions.”
“A stamp duty holiday for first time buyers up to the capital value of £300,00 will make only a modest difference to demand and do little to support those struggling to buy, especially in the Capital where the average house price is £481,556. To put into context, SDLT liability starts at £125,000 and the average UK first time buyer stamp duty tax is only £1,654 but the deposit requirement is closer to £35,000, a much bigger challenge to overcome. However this will cost the Treasury less than £1 billion per annum, a relatively low cost and wildly popular initiative.”
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Tax on empty Homes
“100% council tax premium empty homes is right and should be widely supported. With the shortage of homes available there is no excuse for properties being deliberately left unoccupied.”
“Housing First is a successful programme in Finland and is gathering support across Europe. Today’s announcement is welcome news to deal with the rapid rise in people in temporary accommodation and rough sleeping.”
“Crossrail 2 will be a vital piece of new infrastructure for London, but perhaps more important is the opportunity to connect new communities in Hertfordshire and Essex to Central London. It will also create the opportunity for new density across London.
“5 new towns, with emphasis on the new infrastructure investment in the corridor between Oxford and Cambridge, shows Government is poised to make radical long-term decisions to link housing, infrastructure and employment in the new digital revolution.”
“We would like to see Government look at more meaningful ways to support modernisation of the construction sector. In particular, this includes the off-site construction supply chain, which will need to grow dramatically to meet Government housing delivery targets.
“Capacity is a serious issue, but businesses can’t invest without clear and consistent demand from housebuilders. Government can use its land and planning powers to create a pipeline of demand for off-site housing that will kick start a new generation of high quality, precision-manufactured housing.
“Factory-built housing is also a fantastic way for the housebuilding industry to make a positive contribution to the post-Brexit economy. There is no reason why the UK can’t become a world leader in off-site construction technologies and export our housing products across Europe and beyond.”