The Autumn Budget
The Budget yesterday was an upbeat one, with positive news that austerity was ending (not that it was over), more money to fix potholes, extra cash for those “little things” in schools and an extra £1 billion for the Ministry of Defence were just some of the things that enabled this budget to be sold on the doorstep according to Conservative MP Jonny Mercer.
How will the Budget affect the housing industry, and those trying to get on the housing ladder? A raft of measures were announced to increase housebuilding and help first-time buyers. Chancellor Philip Hammond announced that stamp duty will be abolished for first time buyers of shared ownership properties, expanding upon last year’s decision to abolish stamp duty for homes worth up to £300,000. This measure will be retroactive, backdated to anyone who bought a shared ownership home since last year’s budget.
Further announcements from the Chancellor included an injection of £500 million in to the Housing Infrastructure Fund which aims at assisting councils in building 650,000 more homes, though it is as yet unclear over what time period these will be built. Also of note was the Chancellor’s reference to the Letwin report on housebuilding. It is a claim often repeated that major house builders are engaged in the practice of speculative land banking and that this is contributing to the slow delivery of house completion rates. The report concludes that this claim is without basis in reality. The Chancellor confirmed that the government would respond to the report in full next year.
Further supporting the delivery of new homes was the Chancellor’s announcement that, as part of an effort to rejuvenate struggling high streets, the government would consult on how to simplify the process of converting commercial buildings into homes. According to the Federation of Master Builders this could enable as many as 300,000 to 400,000 new homes to be built from disused buildings.
What did the other parties make of the budget? Labour claimed that the government had broken its promise to end austerity, citing a lack of clarity if departments will still face future cuts or not, and that social security would continue to be cut. The Liberal Democrats labelled the budget as a “standstill non-event” that applied short-term fixes to long-term and deep problems. Their Leader, Vince Cable, cast doubt over whether the government could end austerity without raising taxes.
Overall, such spending promises no doubt sound positive, and a relief after so many years of shrinking budgets and cuts. However, the shadow of Brexit looms large over this budget, the last before the UK is scheduled to leave the EU in March 2019. The Chancellor paid only modest attention to Brexit in his speech, mentioning it first and saying he was confident of getting a good deal. But what if, as seems increasingly possible, we don’t? A no-deal Brexit would no doubt throw yesterday’s speech and the promises made in it into severe jeopardy, potentially requiring the Chancellor to deliver another ‘Brexit Budget’ in the spring of next year.
This article was written by Matthew Roberts, Account Executive at MPC.