Yesterday the Chancellor of the Exchequer delivered his first Budget to the House of Commons after being in the job for just four weeks. Originally scheduled for November, but postponed due to the general election, this Budget arrives at a uniquely challenging time for the country and our economy. Amidst the outbreak of coronavirus, Rishi Sunak’s budget outlines the government’s plans for tax and spending for the financial year. Furthermore, it gives us a much-needed update on our nation’s financial well-being.
Whilst there were several key announcements regarding housing, some may be disappointed at the comparatively minor role housing played within this Budget. Additionally, the government’s plans seemed to be largely indifferent to the Private Rented Sector, despite the fact that several industry players were forecasting a shake-up.
Here are the key housing-related measures announced in the Budget:
- A £12.2bn multi-year extension to the Affordable Homes Programme, representing the largest cash investment in affordable housing in a decade
- Almost £1.1bn of allocations from housing infrastructure fund to build almost 70,000 homes in high-demand areas
- A £1bn Building Safety Fund to remove unsafe cladding from buildings
- £400m for regional mayors to build homes on brownfield sites
- £650m to tackle homelessness
- Stamp duty surcharge for foreign buyers will be 2% from April of 2021
Industry Reaction
Overall, greater investment in new affordable housing and improving building safety has been welcomed by many in the housing sector. However, many still doubt these proposals go far enough to address the scale of issues we are currently facing:
“While an additional £1bn to remove all types of dangerous cladding from buildings over 18m in height is welcome and recognises the urgent need to address building safety following the Grenfell tragedy, the scale of investment required is likely to run to at least 10 times that amount.”
Gavin Smart, chief executive of the Chartered Institute of Housing
“Today was an important first step, but it’s not ‘job done’”
Polly Neate, chief executive of Shelter
As for the PRS, the Chancellor made no specific mention of it in his announcement. Landlords and agencies may just have to be content that there was little to celebrate or be concerned about. The NLA
and RLA have stated that tenants will continue to face a rental supply crisis as a result of the Chancellor’s lack of action:
“The Government is undermining its own efforts to boost homeownership through its attacks on the private rented sector. By choking-off supply and making renting more expensive it is tenants who are hardest hit.”
Looking Ahead
With private renting becoming more ubiquitous across the UK and with rental prices continuing to rise, many will be wondering why the Chancellor has elected to take an indifferent approach to the PRS with this budget. Naturally, it seems the coronavirus pandemic has taken up a huge amount focus in this week’s Budget. As a result, it has perhaps derailed many of the government’s plans. It will be interesting to see how the government’s stance on the PRS will develop over the coming months and especially if we will see more definitive action taken in the Autumn Budget.
