We were promised a budget that would recognise the importance of solving the housing crisis. We got it. Below we set out the announcements that are likely to be of most interest to our housing provider clients.
It is worth noting that a further statement is expected from Sajid Javid tomorrow. We will be sending a further update following that announcement. We will also be providing our thoughts on how RPs can meet the challenge of a step change in delivery necessary to meet the Government’s expectations.
Here are our initial observations on the Budget:
- First time buyers (mainly those accessing the Help to Buy programme (we would imagine)) are at least £1,750 better off in affordability terms with the abolition of SDLT on properties up to £300,000 – but if prices go up as a consequence, Government won’t be happy! OBR has, however, already opined that they will.
- The Right to Buy pilot scheme with RPs continues – though it is not yet clear how this will be paid for and whether local authorities will still have to sell high value voids to fund it (or pay the price). Some of the cryptic comments by the Chancellor about when the borrowing cap for LAs will be increased implies that this may still happen (or at least remain as a stick for those that don’t use their additional debt capacity wisely). On the other hand, were that to be the case, for RBK&C (for example), replacing Grenfell homes would become impossible.
- Reaffirmation of Government’s determination that all LAs and RPs ensure all fire safety assessments are completed as soon as possible and remedial measures carried out. A commitment from Government to fund fire safety measures for LAs where no other funding is available.
- 300,000 target for new homes (but not immediately). That is a target for the mid 2020s. We assume this is Government’s assessment of what the additional measures will enable – though we imagine that assumes a status quo in terms of mortgage availability.
- Oxford-Milton Keynes-Cambridge arc targeted for major growth – though, inevitably perhaps, with a long lead in time.
- 5 new Garden Towns are promised, utilising a mix of public and private investment. No doubt more detail to follow in Sajid Javid’s pronouncement tomorrow.
- £15.3bn of money that we haven’t yet seen. This, together with other commitments made by the Government, brings its support for housing over the life of this Government to £44 billion – in the form of grants, loans and guarantees.
- A further revamp for HCA – Homes England with “beefed up” planning powers. It looks like the Agency will have its hands even fuller if it gets to spend the money promised for small sites infrastructure, remediation and land assembly.
- £400m ear-marked for estate regeneration. On the face of it, this looks a small sum in the scheme of things – the cost of bidding will need to be borne in mind if going for it.
- Guarantees and Home Building Fund (the latter targeted at small and medium builders) could be valuable. Arrangements set up by Mayor of London have been very profitable to date for those who seized them. Builders partnering up with local RPs should be given serious consideration.
- Planning goodies that may be useful
- Presumption of consent for land outside local plan if offered for rent (could be market) or discount sale
- Minimum densities for urban centre/ transport hub developments
- Changes in way developers contribute to infrastructure and affordable housing (S106)
- 100% council tax surcharge for empty properties – the detail on this will be of great interest. Could this make regeneration more expensive?
- £40m extra for Targeted Affordability Funding in areas where private rents are rising fastest. No change in the way Universal Credit of LHA works or is set however – more on this tomorrow no doubt.
- Given the current issues surrounding the payment of NMW and sleep-ins the National Living Wage is set to increase to £7.83 per hour in April 2018 which will put even greater pressure on care providers.
- Plans to publish a discussion paper as part of the Matthew Taylor Review could mean that we finally receive clear guidance over the employment status tests to distinguish between workers and those who are legitimately self-employed.
- The Government will also be looking at the taxation of business expenses which will aim to reduce the burden on employers checking receipts for subsistence.