Yesterday, Philip Hammond announced his second Budget as Chancellor. Our team share their opinions on announcements affecting their sectors.
Partner, Head of Planning and Development
As anticipated, there have been several significant measures affecting the development industry in yesterday’s budget, with a total of £44bn being allocated over the next 5 years with the intention of boosting housing delivery over 300,000 units per year. Measures include £8bn of financial guarantees to support house building and the private rented sector, alongside £1.1bn to unlock strategic sites and new settlements. On a smaller scale the measures also included a £630m pot for smaller sites, with a view to helping the delivery of 40,000 new homes.
Amongst the announcements was also a curious proposal of reviews into reasons behind delays for developments coming forward after grant of permission and a seemingly linked statement that land banked for “commercial reasons “could be compulsory purchased. Whilst a headline winning statement along similar lines of previous Labour suggestions, I suspect the reality is highly unlikely to have a real world impact. Anyone involved in the technicalities of planning, site appraisal and delivery as well as compulsory purchase has an idea as to how hard a test that would be to prove. Any compulsory purchase would be at market value, which also begs the question, who would fund it and what would happen once it has been compulsory purchased? Sell it to another house builder perhaps to put into their land bank? No doubt, more detail will emerge over the coming days and weeks.
Partner, Head of Commercial
Several positive initiatives have come from the Autumn Budget, especially for the commercial and construction sector. News that, from 1 April 2018, operators of illegal waste sites will become liable for Landfill Tax will see a sigh of relief from ‘formal’ operators, ensuring landfill is sent to their sites. The £44bn in overall government support to meet the target of 300,000 homes a year and the £400m to regenerate housing estates is great news for the construction industry considering the sheer amount of materials needed to fulfil the demand.
Looking into the Northern region in particular – we are to see £320m to clean up the former SSI steelworks at Redcar and kick start the 25 year development plan which will see the site transformed into a ‘hotbed’ of new industry. This is fantastic news for the region as it gives the prospect of 20,000 new jobs which is crucial for economic growth and development across the Tees Valley.
Head of Residential Agency
For first time buyers it takes so long to save for the deposit to secure a mortgage and added to that the additional funds required for stamp duty mean it is often a lengthy process before they can become homeowners. The announcement today that stamp duty is to be abolished for first-time buyers on homes up to £300,000, with immediate effect, will be a welcome change and we hope it will have a positive impact on the overall housing market.