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Member Briefing: Treasury Pre-Budget Announcements

Date: 17/03/14

Member Briefing: Treasury Pre-Budget Announcements

The Chancellor yesterday trailed several important announcements in advance of this Wednesday’s Budget. The Treasury has subsequently issued a press release (click here to view).

  • Help to Buy Equity Loan (HtB1) will be extended, in its current form, to 2020, allowing an extra 120,000 new home sales, with a budget of £6bn. Funds will also be available for Wales and Scotland, although the Scottish and Welsh Governments are not obliged to use the funds for a HtB Equity Loan scheme.

  • The government will set up an Urban Development Corporation for a 15,000 home Garden City in Ebbsfleet.

  • We understand the government will also announce its support for Boris Johnson's proposals for Barking Riverside, a JV between the GLA and Bellway Homes. We assume this will mean funding for an over-ground link to a new station on the scheme which has outline permission for 10,800 homes. 

Our discussions with senior officials in DCLG and Treasury suggest there are likely to be further housing announcements in the Budget.

While HBF very much welcomes the HtB1 announcement, the impact of the extension to 2020 on home building will depend crucially on Labour's response. If Labour says it will end the scheme earlier than 2020 if elected, or even leaves it unclear what its policy will be, that will inevitably influence house builders' decisions and forward plans for the post-election period. Attached is a Labour press release in response to yesterday’s announcement. The key phrase would seem to be “a reformed Help to Buy scheme”. This suggests Labour’s initial thinking is not to withdraw the extension to 2020 if it is elected, but to revise the terms of the scheme (perhaps lowering the price limit, restricting it to first-time buyers, etc, perhaps making it more like FirstBuy).

HBF will prepare a more detailed Briefing following Wednesday’s full Budget announcements.

John Stewart
Director of Economic Affairs