Spring Budget 2024: What should the housing industry expect?

Director of External Affairs at the Home Builders Federation, Emma Ramell looks ahead to the Spring Budget announcement on 6 March 2024 and what it may mean for the housing industry.

Broadly expected to be the Government’s last major fiscal event before the General Election, it is fair to say the fervour around the Spring Budget is rapidly intensifying.

For weeks, the press has been awash with speculation as to potential white rabbits the Chancellor, Jeremy Hunt, may pull from his hat (or more accurately, red box) and how much of a restraint the economy will be on his ability to do so.

While many sectors of the economy have struggled over the past 18 months, house building is arguably more invested than most in the speech Mr Hunt will give at the dispatch box on 6 March.

Primarily, this is because of the challenging situation the industry finds itself in with planning permissions at record lows, 150,000 new homes blocked by nutrient neutrality mitigation measures, severe delays in the planning system, SME developers being decimated and no Government support in place for struggling first-time buyers (FTBs).

But beyond this, for the first time in a considerable while, there is a real sense that housing may take centre stage, with numerous articles suggesting that HM Treasury is poised to introduce 99% mortgages for FTBs and some form of change to Stamp Duty.

Such policies are not without their critics, but with the average age of FTBs increasing, and the average deposit size hitting £50,000 last year, few would disagree that some form of help to support aspiring homeowners, particularly those without access to the Bank of Mum and Dad, is much needed.

That’s why in HBF’s Budget submission, we called on the Government to introduce a new, targeted home ownership scheme for FTBs which would significantly reduce the deposit requirements for households who want to buy a new, energy efficient property, work with industry and lenders to expand green mortgages, and reinvigorate the broader housing market by reassessing stamp duty and increasing the provision of housing for older persons.

Without a crystal ball, it’s impossible to know with any certainty what measures the Chancellor will announce.

But the shining of a bigger and brighter spotlight on the barriers faced by those looking to buy a new home is never a bad thing, especially in an election year.

That said, measures to boost demand are just one side of the coin and must be taken in tandem with policies to increase the supply of new homes.

Yet, amidst the speculation and predictions, there have been scarce indications of what action, if any, the Government intends to undertake on March 6 to address this issue.

While disappointing, this is hardly a surprise.

A pre-General Election Budget is inevitably a more political affair than others and the Conservatives will undoubtedly be looking to use the limited fiscal room they have on measures that voters will see the benefit of quickly.

As such, a significant increase in the budgets of Local Planning Authorities is unlikely to pass the litmus test even if the consequences of this would have a positive impact on both housing delivery and economic growth.

But there are other steps Treasury could take that would help break ground, not the bank, such as revising ‘Golden Brick’ to increase affordable housing, publishing a national brownfield map and further incentives for LAs to increase the availability of small sites in local plans.

They may not be the headline grabbing announcements politicians typically strive for, but they would start to chip away at the many walls that are preventing a £40bn a year industry, that supports almost 800,000 jobs, from delivering on its full potential.

Looking beyond the Budget, there will be other opportunities for the home building industry to make the case for action on its longer term aims such as nutrient neutrality, planning delays and housing targets.

The publication of the Competition and Markets Authority’s (CMA) recent report will be helpful for building momentum in this regard, particularly its recognition of the challenges the planning process is presenting for developers.

And so, while the Budget may be the Government’s last fiscal event before the election, it is certainly not the industry’s last chance at finding a resolution to the challenges it faces.

HBF’s 2024 Spring Budget submission is available to view within the members’ section of the website.