Housing highlights from the Autumn Budget 2018
The Government delivered it’s Autumn Budget and the Chancellor of the Exchequer, Philip Hammond, reaffirmed his commitment to the UK housing market with a series of announcements:
- A new Help to Buy scheme from April 2021
- Stamp Duty relief extended to first-time buyers buying shared ownership properties
- Affordable Homes Programme progresses
- Further grant funding in London announced
- Housing Revenue Account Cap abolished
Help to Buy extended
The government was under significant pressure to revise the Help to Buy initiative and continue the scheme beyond its 2021 deadline. The Autumn budget delivered the following:
- A revised scheme that is restricted to first-time buyers will be launched in April 2021.
- It includes regional property price caps to ensure it is more targeted to people who need it most. Prices will be capped at 1.5 times the current forecasted average first-time buyer price in each region – with a maximum of £600,000 set in London.
- The government says it has no plans to continue offering Help to Buy equity loans beyond March 2023.
- The Budget extended relief to all first-time buyers of shared ownership properties worth up to £500,000.
- This change is retrospective, meaning that first-time buyers who bought a shared ownership property with a price up to £500,000, since 22 November 2017, can claim a refund.
- Phillip Hammond stated that the recent Stamp Duty changes have so far helped 121,500 buyers placing first-time buyers in a more positive position within the UK housing market.
Affordable Homes Funding Boost
- Nine housing associations were allocated £653 million from the Affordable Homes Programme, to deliver over 13,000 additional affordable housing starts by March 2022.
- £1 billion of new guarantees to support small and medium sized builders was implemented by the British Business Bank.
Grant Funding in London’s Docklands
- Grant funding of £291 million for vital infrastructure on the Docklands Light Railway in East London has been announced.
- The release of pressure on existing services in the area has the potential to unlock over 18,000 homes.
Non-resident stamp duty consultation
The government will publish a consultation in January 2019 on introducing a 1% stamp duty surcharge for non-residents buying a home in England and Northern Ireland.
Housing Revenue Account Cap is abolished
The Housing Revenue Account cap has been abolished in the Autumn Budget, allowing councils to increase house-building to around 10,000 homes a year. The Housing Revenue Account cap was considered the biggest obstacle to councils initiating the building of new homes.
Consultation of Planning Reforms
In the Autumn statement the government announced that they plan to build on existing planning reforms to make it easier to extend existing buildings upwards to create new homes and support the regeneration of high streets. A consultation on the proposed planning reform aims to simplify and speed up the planning system allowing more effective use of land and, ultimately, deliver more homes.
Henry Knight, Managing Director, Springtide Capital commented: “Springtide Capital welcomes the steps taken in the budget, which provides a number of opportunities to bring momentum into the housing market. The announcement that the Help to Buy scheme in particular is extending beyond its initial 2021 deadline will help more people to get on the property ladder and is positive news for first-time buyers.”