Of the 25 key elements of the Government’s Autumn Budget, there are three areas that are set to boost the housing sector by helping first-time buyers, building more homes and boosting skills in the construction sector – ‘no silver bullet solution’ but a step in the right direction.
The key areas included:
- The Chancellor has promised £44bn in capital investment to boost the housing market and
- 300,000 homes to be built every year by mid-2020s;
- Mr Hammond has abolished stamp duty for all first-time buyers (FTB) for homes up to £300,000.
Abolishing stamp duty for FTBs
Any incentive that helps first-time buyers to purchase their first property is welcome, however, the previously mentioned £5,000 saving announced by the Chancellor is more likely to be £1,660 as detailed in the official Budget documentation. Why? Because the average first-time buyer across the UK will not be able to purchase a property at £300,000. Londoners, however, are used to far higher property prices for a one or two-bedroom property and will most likely feel the benefit of a £5,000 saving.
According to the Government, 95% of first-time buyers who pay stamp duty will benefit. First-time buyers of homes worth between £300,000 and £500,000 will not pay stamp duty on the first £300,000; they will pay the normal rates of stamp duty on the price above that. This will save £1,660 on the average first-time buyer property; with 80% of people buying their first home paying no stamp duty. There will be no relief for those buying properties over £500,000.
300,000 new homes a year
The Chancellor is injecting funds to support the home building industry, specifically helping those businesses that are not already dominant in the sector. Mr Hammond pledged £15.3 billion in new financial support for house building over the next five years – taking the total to at least £44 billion. This includes £1.2 billion for the government to buy land to build more homes and £2.7 billion for infrastructure that will support housing.
In addition, the government will also create five new ‘garden’ towns and make changes to the planning system to encourage better use of land in cities and towns. This means more homes can be built while protecting the green belt. To address the UK’s vacant property issue, the Government announced an increase in the maximum empty home Council Tax premium to 100%.
£64 million for construction and digital training courses
One of the biggest challenges faced by the construction industry is a skills shortage, which is why a new pledge of £34 million towards teaching construction skills like bricklaying and plastering, and £30 million towards digital courses using AI will be more than welcome.
This funding is provided in advance of launching a National Retraining Scheme that will help people get new skills. It will be overseen by the government, the Trades Union Congress (TUC) and the Confederation of British Industry (CBI). They will decide on other areas of the economy where new skills and training courses are needed.
Henry Knight, Managing Director, Springtide Capital commented: “It is good to see further support for the housing industry, specifically digging deeper into the fundamental issues facing the construction industry. The abolishment of stamp duty land tax for first-time buyers purchasing a property up to £300,000 is another positive move, and contrary to some opinions, I can’t see it impacting house prices dramatically.”