March 4th 2024
Spring Budget 2024: Experts predictions for the housing sector
On 6th March 2024 chancellor Jeremy Hunt will deliver the government’s Spring Budget. Here’s what housing experts think this will mean for their sector.
The Spring Budget, or just the Budget, is when the government updates the public on the state of the UK economy, shares projections made by the Office for Budget Responsibility (OBR) and announces its fiscal plans for the year ahead. On Wednesday, Mr Hunt is expected to announce this year’s plan, just four months after he delivered the Autumn Statement.
However, as the UK has been involved in a financial crisis since the cost-of-living began to rise in 2021, the public aren’t hopeful that his statement will contain good news. Speaking on Sunday with British journalist Laura Kuenssberg, Mr Hunt said he wanted to move Britain towards becoming a lower-tax economy, but that he would only be able to do so ‘as and when we can afford it.’
Pulling the plug on any kind of hopes for a huge package of giveaways, Mr Hunt expressed that the most ‘unconservative’ thing he could do would be to announce tax cuts funded by higher borrowing.
Mr Hunt said: ‘This will be a prudent and responsible budget for long-term growth.’
With this message in mind, various housing experts have collected their thoughts on what the budget may have in-store for their industry.
Daniel Austin, CEO and co-founder at ASK Partners, said: ‘With housing set to be a battleground point in this year’s election, it is expected to feature heavily in Wednesday’s Budget. As the sector moves to the top of the agenda for all parties, we hope to see a long-term plan for new homes, including social housing, however, we expect we will see more short-term fixes. Stimulus will be become but can create unnecessary froth.’
‘Voters and developers alike will be keenly listening out for housing policy in the Budget. For voters, a stamp duty holiday or reprieve may be a welcome sign,’ Daniel said. ‘For developers, eased planning regulations for brownfield sites and conversions will be popular.’
Daniel added: ‘However, the government will be faced with a challenge – striking a balance between trying to increase housing supply and therefore affordability by supporting developers and private landlords but appealing to voters who do not want to see greenfield development. The planning system remains hotly political and as a result, landlords and developers are unlikely to see much in their favour.’
In addition, Karen Charles, executive director of Boyer, echoed similar views. She said: ‘The list of what the Chancellor could introduce to bring forward more new homes is considerable.
‘From my point of view, we need to see initiatives to support the delivery of homes in sustainable communities with high quality placemaking and healthy neighbourhoods in settlements where people want to live such as large villages and towns, alongside high-density housing on urban brownfield sites which is the government’s preference. There is a need for balance and the delivery of a variety of homes in a mix of locations to meet different housing needs.’
The focus on delivering more homes comes from the government’s frequent failure to meet housebuilding targets. According to their own statistics, the government failed to meet the goal of delivering 300,000 new homes, despite an additional 234,000 homes being added to England’s housing stock in 2022-23. In 2022, government figures show 212,570 new builds were delivered alongside 22,160 properties which were changed from non-domestic to residential and 4,500 houses which were converted to flats.
Another problem that is currently plaguing the housing sector is how much it costs to buy your first property. Tim Foreman, managing director of land and new homes at Leaders Romans Group, claims this should be a government priority.
Time said: ‘Since the government ended the Help to Buy scheme it has become increasingly difficult for first time buyers to get on the housing ladder, with many having to find huge sums of money to use as their deposit. I would like to see the government turn its attention to first time buyers, appreciating the difficulties that they face and enabling them to make the very important first step on to the ladder – and in doing so, getting the market moving for thousands of others.’
Moreover, speaking about property costs as a whole, Sarah Thompson, managing director at Mortgage Scout, said: ‘All that we in the mortgage industry ask of the chancellor is that he concentrates on lowering interest rates.’
‘This means getting inflation under control – admittedly no mean feat – so that the Bank of England can take a majority decision to reduce interest rates,’ Sarah said. ‘In the past few months members of the Monetary Policy Committee have expressed a desire to do so; we’re halfway there.’
She added: ‘Once interest rates begin to come down, the housing market will react quickly. Addressing both the cost-of-living crisis and the housing crisis, this will result in a win-win for both politicians and the electorate.’
Images: Ant Clausen and Melinda Nagy
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