Budget 2021: What it means for housing sector

Rishi Sunak's Autumn Budget announced funding for new homes, redevelopment of brownfield land, and removal of dangerous cladding.
Rishi Sunak MP (Demo)

Rishi Sunak’s Autumn Budget announced funding for new homes, redevelopment of brownfield land, and removal of dangerous cladding.

In his second budget of the year, the chancellor said housebuilding would get the “largest cash investment in a decade”

Sunak promised a multi-year investment of nearly £24 billion to build new homes. He confirmed £1.8 billion would be spent on developing brownfield land, unlocking one million new homes.

Paul Hawthorne, CEO of developer and placemaking expert LCR, commented: “When ironing out the practicalities of the £1.8bn brownfield fund, the opportunities available on transport-linked land should not be overlooked. There is space for tens of thousands of homes on brownfield sites surrounding the UK’s railway network. The £7bn in funding for regional transport transformation also announced by the chancellor should help on this front, freeing up more of the brownfield land surrounding transport hubs for development to create homes, regenerate communities and drive levelling up. However, the availability of capital isn’t the only factor holding back more brownfield development. Many sites with significant potential, particularly in town centres, have complex, piecemeal ownership structures and require close private and public sector collaboration to unlock.”

James Forrester, MD of estate agents Barrows and Forrester seemed underwhelmed, noting that many of the promised homes had already been announced: “While Boris Johnson might not be a fan of recycling, his chancellor certainly is and so the 180,000 new homes pledged today is certainly no step forward,” he said. “The only bone thrown to a nation of ravenous homebuyers starved of housing stock has been a scrap of properties built on brownfield sites. According to the MHCLG, there are some 36,000 hectares of brownfield land across England alone, enough to deliver over 1.3m new homes. So even if the government does make good on its promise, it’s just a fraction of what they could, and should, be building.”

Benham and Reeves,’ director Marc von Grundherr agreed: “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,” he said. “The £11.5bn pledged for 180,000 affordable homes is 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.”

The chancellor also announced £5 billion to remove dangerous cladding from high rise buildings, partially funded by the Residential Property Developers Tax to be levied on developers with profits over £25 million at a rate of four per cent, although according to Savills only 31 developers made a profit of more than £25 million in 2019, the last year when housebuilding was not affected by the pandemic. No mention was made of buildings with potentially unsafe cladding below 18 storeys, however, where thousands of leaseholders remain unable to sell their homes.

The Chancellor further promised £65 million to ramp up England’s planning system, including digitisation to make local plans easier to access. Hawthorne was fairly optimistic on this front: “The £65m to help digitise the planning system could make it easier for planners and local authorities to identify and bring forward the opportunities that the brownfield fund is committed to supporting,” he said.

Construction Industry Training Board policy chief Steve Radley, meanwhile, was hopeful the chancellor’s commitment to investment in training would pay dividends: “Today’s large-scale investments in T levels, maths, Skills Bootcamps and modernising Further Education will provide crucial support on skills and should help to ease pressure on employers looking to recruit and train,” he said. “Building better pathways into work through traineeships and bootcamps and helping colleges to modernise are key investments. We look forward to building on our work so far to shape these programmes to deliver the skills the industry needs.”

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