There was little focus on the housing market in today’s Budget, with the most significant news being confirmation of development on brownfield sites and a levy on larger housebuilders to fund cladding removal.
Specifically, chancellor Rishi Sunak said that £24bn will be earmarked for housing, with £1.8bn being spent on bringing 1,500 hectares of brownfield land into use and £11.5bn funding up to 180,000 new “greener” homes on brownfield land.
He also confirmed that the removal of unsafe cladding will be partly funded by a residential property developers tax, a levy of 4% on developers whose profits exceed £25m.
Additionally, Sunak announced that £65m was being freed up to digitise England’s planning system.
Benham and Reeves director Marc von Grundherr, says: “The chancellor has chosen to give the sector a bit of the cold shoulder with just a handful of headline figures, clearly believing his job is done having fuelled house prices to record highs via the recent stamp duty holiday.
“We need more homes to satisfy our ever-growing appetite for homeownership and an insignificant level of brownfield development is more of a slap in the face than it is an outstretched hand
“As for the £11.5bn pledged for 180,000 affordable homes, it’s a start, but hardly news given it was announced by Robert Jenrick a year ago.
“It simply isn’t enough and with the government consistently failing to meet their previous housebuilding targets, it will be a miracle if we see a brick laid on brownfield land or a meaningful level of affordable homes delivered in our lifetime.”
Audley group chief executive Nick Sanderson echoes this sentiment. He says: “The Treasury announcing 160,000 greener homes on brownfield sites again shows that the government is totally missing the point when it comes to the issues in the housing market.
“They have no drive to address the root cause of the issue and this will once again do nothing but paper over the cracks, allowing a broken system to remain broken.
“In today’s Budget there is no detail on the types of houses the government want to see built, yet that’s the real question that needs to be addressed. We have enough homes. That’s never been the problem. The Government’s focus has to shift to specialist housing, and fast.
“This will both free up homes, while simultaneously taking pressure of stretched care services. It’s never going to be greener to build more, when the solution is to build smart.
“Planning reform is at the centre of this and the announcement that England’s planning system will be digitised is a step in the right direction.”
However, Just Mortgages national operations director John Phillips says that “In this instance, no news is good news.”
He explains: “While some may have been calling for a review of stamp duty, the lack of action is actually a positive for the market.
“Last year, transactions were artificially inflated by the tax savings and the pandemic, and since stamp duty has returned, the urgency has dropped, but demand has remained.
“In the coming months we will start to get a true reflection of the state of the mortgage market. Lenders are sending positive signals with the number of 95% LTV products currently available. While some surveyors are rightly cautious, the abundance of low deposit products suggests lenders do not feel a price-crash is imminent.
“The imbalance of buyers and sellers backs this position up. There are still over ten buyers for every one property listed, and although a sizeable sum has been allocated for new homes, these will take years to build and in the meantime, prices will continue to rise.”
