This week, the Chancellor of the Exchequer Philip Hammond announced his Autumn Budget, outlining how and where the nation’s money will be allocated over the next year.
As ever, housebuilding was a sector in the spotlight and, given the government’s ‘Fixing Our Broken Housing Market’ whitepaper released in February, there was a lot of expectation and anticipation around Hammond’s announcement.
So, apart from a fair few jokes, what did the Chancellor say? We’ve picked out some of the new measures to be introduced that will affect the housing industry.
Changes to Stamp Duty
The government has announced that it will support first-time buyers by permanently raising the price at which a house becomes liable for SDLT (Stamp Duty Land Tax) to £300,000. The existing rate of 5% will apply for properties valued between £300,000 and £500,000 in London and other expensive areas. The relief will not apply for properties over £500,000.
This policy has quickly come under scrutiny, though, with the Office of Budget Responsibility (OBR) suggesting that the removal of stamp duty will actually more likely benefit current property owners than first time buyers. The OBR stated that ‘[HM Revenue & Customs] concluded that the majority of the value of relief had fed through to higher house prices and that it “has not had a significant impact in terms of improving the affordability of residential property for first time buyers.”
The OBR also estimated that the consequence of this new tax relief will be a 0.3% increase in house prices.
Shortening the Gap
It has been widely covered that the UK construction skills shortage has increased exponentially, with many fearing that a true crisis is on the horizon. The government will provide £34 million to introduce innovative training models throughout the country, including a particular focus on construction in the National Retraining Scheme, a scheme which the government hope to aid in boosting the UK’s productivity.
Estate Regeneration
The budget outlines £400 million of loan funding for the regeneration of estates and run-down neighbourhoods, with the aim to transform these areas and provide new homes in high-demand areas.
Speeding up of Planning Permissions
The Chancellor announced that the government will consult on various factors in order to speed up the planning permission process. These include:
Deallocating Site from Plans
The government will strengthen policy to make it clear that allocated land should be taken out of a plan if there is no prospect of planning application being made.
Additionally, the government is to set up a review panel to explain the significant gap between housing completions and the amount of land allocated, which is set to make recommendations for closing this gap in 2018.
What do you think about the 2017 Autumn Budget? Has the Chancellor got it right? Let us know in the comments below.