Rishi Sunak’s mini Budget: sector responds to stamp duty cuts, green investment and employment plans
Organisations from across the housing sector have been reacting to chancellor Rishi Sunak’s ‘mini Budget’, which includes his plans to help the country’s recovery from the coronavirus crisis.
His announcements today included new details around how to get the housing market moving again by introducing a stamp duty holiday and huge investments to retrofit homes to make them carbon neutral.
Inside Housing has brought together the responses from some of the sector’s leading figures and bodies.
Kate Henderson, chief executive, National Housing Federation: “Helping young people into work alone is not enough to give the next generation a fresh start. We have known for years that the severe shortage of social homes is stopping young people getting on in life.
“Homelessness among young people has risen dramatically, increasing numbers of young people are unable to move out of their parents’ homes and many are forced into debt because of the high cost of rent. This has all been exacerbated by the pandemic. Waiving stamp duty will help some people, but it doesn’t solve the problem of the shortage of homes or help those who are really struggling.
“Earlier this week we welcomed the government’s confirmation that funding for the Affordable Homes Programme will go ahead and the funding for a social housing retrofit pilot. But significantly more long-term funding from government is needed to kick-start a building boom of social homes at the scale we desperately need. This is the only way to create enough affordable homes, rebuild left-behind communities across the country, create local jobs as well providing young people with access to enough training and employment support.”
Gavin Smart, CIH chief executive, said: “The announcement of £50m to retrofit social housing, plus £2bn towards a new ‘green homes grant’ for lower income households is a good start, although much more investment is needed. It also brings the potential to create much-needed jobs.
"This must be the first step in addressing the climate change emergency and has the potential to reduce fuel poverty.
"Government must ensure it is followed quickly by a clear plan and resources to get the housing stock up to the targeted energy efficiency levels by 2035 - and meet the government’s firm commitment to achieve that enormous task.
"We’re seeing just the first instalment of a promised £9.2 billion investment in the Conservative manifesto and we now look to the Spending Review in the Autumn for the government to demonstrate a clear commitment to delivering a zero-carbon future for the nation’s housing stock.
"The temporary cut in stamp duty might provide an opportunity to stimulate the housing market but, without increasing supply, this is likely to lead to an increase in already high house prices.
"That’s why we need to see housing – and homes – at the heart of government’s plans for economic recovery.
"The Chancellor’s Autumn Budget and Spending Review will provide an early opportunity for government to invest in new homes, including the 90,000 homes at social rents needed each year to solve our acute housing crisis.”
Polly Neate, chief executive, Shelter: “In the midst of the the biggest economic downturn in living memory, what we needed from the chancellor today was action, not distraction. Unfortunately cuts to stamp duty are just another distraction, as we are facing the loss of hundreds of thousands of jobs and new homes. Changes to stamp duty are wholly insufficient for the challenge this country is facing.
“Voices from across the political spectrum have been calling for urgent investment in social housing to stimulate housebuilding, protect jobs, and provide urgently needed homes.
“In the face of this mounting crisis we need rapid spending, bringing forward the money already committed to affordable housing to be spent now as a rescue package – not in five years’ time. This is a major missed opportunity by the chancellor.”
Jasmine Whitbread, chief executive, London First: “The stamp duty holiday offers a significant incentive to relaunch the property market across the country, but it does not go far enough to support Londoners in their attempts to move, as the average prices are too high for many to benefit.
“If the true aim of the measure is to stimulate demand, then the government must build hundreds of thousands of homes, at pace, in order to combat the housing crisis this country faces.”
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Nicholas Harris, chief executive, Stonewater: “The chancellor is right to focus on the potential of mass retrofitting homes to create thousands of jobs and help the UK economy bounce back from COVID-19. There is an incredible opportunity to improve energy efficiency and tackle fuel poverty.
“The £50m Social Housing Decarbonisation Fund is a welcome first step to ensure we invest in the best approaches and technologies. Once this is clear, however, as a country we must maintain this rapid pace and seize the chance by investing the necessary sums – and it will be billions – to create jobs, cut carbon and end fuel poverty.
“The confirmation of the £12.2bn, five-year Affordable Homes Programme to build 180,000 affordable homes is a very welcome step in the continued recovery from the pandemic. It will allow Stonewater and many other housing providers to help hundreds of thousands more people out of temporary accommodation and off council waiting lists into sustainable, affordable homes.
“It will also allow us to continue to support hundreds of jobs: every new home built supports one-and-a-half to two jobs in the construction supply chain. Where possible, we will look to participate in the new Construction Talent Retention Scheme to protect existing employment.”
Chris Denning, partner, MHA MacIntyre Hudson: “The time period of the stamp duty relief announced by the chancellor, from now until 31 March 2021, is relatively short. It gives little opportunity for house builders to use the reduction to inform strategic decisions on construction plans beyond the next nine months.
“The current fall in house prices may also encourage people to sit tight until the market recovers and there is huge uncertainty around job security. This policy will likely need extending in order to have real economic impact.”
Lee Pickett, real estate partner, DWF: “The stamp duty land tax (SDLT) cut by the chancellor is a nice boost for the housing market, which is often considered the bedrock of the wider UK property market.
“Those not yet committed to a house purchase may be encouraged to follow through rather than withdraw (in many cases collapsing a chain of several transactions).
“Where new build sales were incentivised by SDLT contributions, those costs which were effectively considered price reductions by mortgage lenders are now being met by the public purse, which should give a boost to house builders and help stabilise or even improve values/house prices.”
Brian Berry, chief executive, Federation of Master Builders: “I welcome strongly the package of measures announced today. While these initial investments will kick-start construction and training, the government must build on these commitments in the autumn to ensure that growth and jobs are sustained beyond next year.”
“Temporary cuts in stamp duty will boost the housing market and remove a black cloud that hangs over many second-time house hunters.
“I’m particularly pleased this is taking place with immediate effect, as we know that potential homeowners typically look for a new home in September.
“Today’s confirmation of the extension of the Home Building Fund targeted at SMEs is also welcome. Looking ahead to measures to rebuild the economy, investment in planning departments and streamlining of the planning application process will be needed to ensure we also bring forward new development to ease our housing crisis.”
Kush Rawal, director of residential investment, Metropolitan Thames Valley: “We welcome the chancellor’s stamp duty holiday, which makes shared ownership homes an even more attractive option for people looking to own their own home. Removing stamp duty from almost all initial share purchases means that key workers will be able to buy a shared ownership home with as little as two months of rent as their deposit.”
Ruth Phillips, construction partner, Shakespeare Martineau: “The £50m fund for social housing retrofits certainly provides food for thought for registered providers. However, the announcement could throw up numerous logistical difficulties.
“Many contracting partners will undoubtedly be keen to be involved in these projects given the current economic climate and registered providers should use this opportunity to reflect on how they engage with their supply chains.
“Ensuring value for money is essential, but tenants themselves mustn’t be forgotten.
“Registered providers should be looking for construction partners who are willing to enter into collaborative contracts with transparent working relations, which put tenant engagement and satisfaction at the centre of the retrofit process.”
Dave Sheridan, chair, Ilke Homes: “While the chancellor’s measures to retrofit 650,000 homes are absolutely on the money, building new eco homes must remain the priority. If we are to recover swiftly from this downturn then modern methods of construction must be at the forefront of our plans.
“Factory-built homes are delivered faster, greener and are of a higher quality than traditional builds, and in the long run will save billions. For a green recovery we need green, modular homes.”
Alicia Kennedy, director, Generation Rent: “It is tragic the chancellor did not take the chance today to help the half a million renters who have got behind on their rent in the last few months. While support for jobs is welcome, people are struggling to put food on the table now and face the threat of losing their home when the eviction ban is lifted next month.
“The stamp duty holiday doesn’t help renters whose incomes and savings have been destroyed by the pandemic and face a further setback to their hopes of buying a home. Right now the government is leaving renters to bear the cost of the pandemic – we need Rishi Sunak to increase Local Housing Allowance, remove the restrictions stopping people from accessing it, and end the rent debt crisis before it causes mass homelessness.
“We welcome the £2bn Green Homes Grant, which could make a huge difference to the quarter of private rentals that are non-decent. Renters are more likely than homeowners to live in an inefficient home, but if they are going to benefit, the government must make it easy for renters to request improvements. Because enforcement of standards is so patchy, landlords don’t have much incentive to insulate their homes, so renters need the right support to make the most of this scheme and pay less for their heating.”