Sponsors and partners of UK Property Forums were left largely underwhelmed by the property-related measures in Chancellor Jeremy Hunt’s Spring Budget last Wednesday.
What it lacked in terms of addressing the housing crisis was a recurring theme.
Mike Shearn, development director for Haslams Estate Agents, said: “After many years I have become somewhat conditioned to disappointment when it comes to the short-termist and self-interested approaches politicians of all colours apply to housing.
“Just ask anyone who has had a planning application going to planning committee just before a local election!
“My expectations of the Budget were, therefore, as low as they have ever been and so I was not surprised – although I am obviously disappointed that there was nothing to stimulate supply and address the housing crisis.
“My disappointment is obvious given that I make a living from housing, but I am under no illusion that my disappointment must pale into complete insignificance to those that are on the ever-growing housing waiting lists or cannot afford to rent or buy a home of their own.”
Mark Slater, managing director of WWA Studios, said: “The Budget lacked any real action in terms of solving the housing crisis. Whilst there were a few blockbuster project announcements, there was a lack of an overall strategy to deliver housing on a large scale.
“Furthermore, no mention was made of safeguarding homelessness services which will exacerbate the situation.
“The country is in a state of stagnation and desperately needs growth. A proper housing strategy which creates employment, reduces the burden on the NHS and puts roofs over people’s heads could greatly contribute.
“Unfortunately, it seems we will be waiting until after the election before meaningful policies are announced to deliver this.”
In a joint statement, Kelly Matthews, head of residential lettings for Savills in Oxford and Ed Meyer from Savills Cambridge, said: “The Budget has bigger implications for private landlords and second homeowners than current and aspiring homeowners.
“The abolition of multiple dwellings relief is likely to temper investment among landlords, while the targeted cut in capital gains tax on residential properties may tip the balance for a few landlords who have questioned their ongoing investment in the sector.
“That, in combination with changes in rental regulation, won’t do much for rental supply. But neither will it necessarily make it substantially easier for people to get on the housing ladder.
“Without any specific measures to help first-time buyers, it may well accelerate the restructuring of the buy-to-let sector to bigger, less mortgage-dependent landlords, as much as open up stock to those looking to get a foot on the housing ladder.”
Laura Ludlow, principal associate for Mills & Reeve, said: “Although described by the British Property Federation as ‘generally very boring’, the following measures in the Spring Budget will impact on the real estate investment sector:
- Abolition of SDLT Multiple Dwellings Relief, for being not as effective as expected, may impact on Build to Rent funding models
- A raft of proposals to support life sciences will create opportunities across the Golden Triangle. New proposed markets for life science funding should facilitate growth and scale-up. The sector will welcome £10.2m investment to support the development of the Cambridge Biomedical Campus, £118m for Canary Wharf and progressing the Euston Quarter vision.
- Ongoing reforms to increase grid capacity will be welcomed by developers, concerned by the impact of inadequate infrastructure for much-needed developments. Problems with water supply still need attention.
- The DLUHC consultation on an accelerated planning service for major commercial/mixed-use developments is sure to attract many responses from a sector frustrated by planning delays.
- The new Reserved Investor Fund is one to watch, as a new vehicle for investment in UK real estate.
Brian Dowling, partner at Boyes Turner, said: “As inflation has only just started to come down to acceptable levels, it never seemed likely that this Budget would cut taxes for property developers or investors, or announce significant new loans or grant funding.
“A lot of property lawyers will be relieved that there are no SDLT holidays or similar temporary tax cuts. The main change to SDLT was to withdraw multiple dwellings relief. This was being misapplied/misused but was handy when buying portfolios of completed houses or apartments.
“Capital gains tax on property is coming down from 28 per cent to 24 per cent, which should in theory encourage the sale of second homes.
“There is a change to how registered providers pay SDLT when buying higher value buildings, which may be intended to encourage them into the market to buy up bigger homes.
“There are changes to film credits which may help our burgeoning film industry in the Thames Valley, and also a confirmation that Surrey and Bucks will get more devolved powers. So we didn’t get Canary Wharf amounts of money (cough cough) but there was still something in there for the region.”
Abigail Jones, director in the development team at Savills in Cambridge, picked up on Michael Gove’s announcement of investment in Cambridge. She said: “News that the proposed Cambridge development corporation will receive a long-term funding settlement at the next Spending Review is to be welcomed.
“Our own research, released at the end of last month, demonstrates that there needs to be significant investment in the delivery of new homes and the amount of lab space if the city is to fulfil its potential and remain a world leader in life sciences and technology.
“In particular, there are issues around infrastructure so the £10.2 million announced to support the development of the Cambridge Biomedical Campus – including £7.2m to unlock improvements to local transport connections – is a strong step in the right direction.
“The growth of Cambridge – and the Government’s plans to build 150,000 homes as part of its 2040 vision – will only happen with clear timelines for investment and delivery of new infrastructure, aligned with the Local Plan process.
“Alongside electricity and water challenges, this also has to include the provision of education and health and social care amenities, as well as a range of housing tenures and types to ensure the city meets its range of housing needs.”
Pete Canavan, partner at Carter Jonas (Oxford), said: “The Budget was notably short on fiscal incentives for housebuilding, support for first time buyers and a means to address housing targets – which must now rise to 385,000 per annum according to recent analysis by Capital Economics, due to previous undersupply. To address this issue planning needs root and branch reform, not a mere tinkering at the edges and we had hoped for something more substantial.”
On specific issues he said: “The ‘accelerated decision making’ on commercial planning applications is a good soundbite but without addressing the continued under-resourcing it will be impossible for the timescales to be met.
“The news that the Government is launching round two of the Local Nutrient Mitigation Fund is a step in the right direction.
“And I am not convinced that AI can speed up Local Plan production. Essentially Local Plans are based on local engagement and local input. They must remain locally nuanced and cannot be created by an algorithm or by taking human contact out of the equation.
“I come into contact with the expression ‘democratic deficit’ all too often, and this would only be increased if AI were to replace human contact.”
Mike Righton, managing partner for the Thames Valley region for RLB, said: “The recent Budget announcement has significant implications for the construction industry.
“With funding of £4.5bn for strategic infrastructure, life sciences, manufacturing and the NHS, these sectors are poised for growth.
“The Thames Valley and the Golden Triangle are perfectly situated to capitalise on this funding. Further investment in the planned north Wales nuclear site and in green energy projects will also spur the energy construction sector.
“Incentives for affordable housing construction and renovation initiatives aim to address housing shortages and promote economic activity in the industry. The continued fuel duty freeze will also assist with rising costs. Potential challenges may arise from changes in taxation policies or regulations affecting construction businesses.
“Overall, the Budget’s focus on key sectors presents opportunities for expansion and development within the construction industry.”
Philip Campbell, commercial director at MEPC Milton Park, did have reason to celebrate. He said: “We welcome the Budget measures to accelerate R&D tax relief for life science and advanced manufacturing companies, providing a further boost to the UK’s ambition of becoming a science and tech superpower.
“Similarly, the announcement of an additional £360m across life sciences, automotive and aerospace sectors is a step forward in helping to turbocharge the UK’s world-leading R&D capabilities across leading innovation clusters.
“Together, these measures will likely help strengthen the demand for flexible laboratory and commercial space across the UK’s life science ecosystem. Having a streamlined approach to planning, such as the 10-day local development order in place here at Milton Park, will be required to help meet this growing demand now and in the future.”
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