Is this a Budget for Builders?

Is this a Budget for Builders?

As SME developers in the North West, we have taken a closer look at the 2017 Budget, which some in the industry have called ‘a budget for builders.’  

 

The £44 bn committed to housing over the next five years does indeed put housing front and centre of this Budget although some of the figures have actually been announced previously – sneaky!

New Homes:

Nobody is going to dispute the fact that Britain needs to build more homes and so we are pleased that the government says it want to build 300,000 new homes a year.  But the government has not explained how much land it will be make available to build these homes on.

Notion Developments particularly welcomes the news that the Home Building Fund, which is aimed at small and medium sized builders like us, will see an additional £1.5 billion.

However, the success of the new fund will depend on the criteria for lending which is sometimes out of reach of the SME developers it is supposedly aimed at.  We also worry about how streamlined the process will be - applying, getting approval, drawing down -  as in our experience, this can sometimes be a tedious process which can create its own delays.

As a Salford based company that specializes in building small developments (from 5 up to 100 units) it’s also good to note a further fund of £630m which specifically aims to prepare smaller sites to come to market. 

The emphasis placed on councils to deliver these smaller sites could also allow companies like us to get a foot in the door of social housing development.  And social housing providers will no doubt be delighted at the news that Housing Revenue Account caps in areas of high demand will be lifted to encourage new builds.

Skills

We have previously voiced our concern about the lack of skilled construction labour and indeed, if we don’t have the people in place to build these proposed new homes – the government is on a hiding to nothing with its ambitious new build targets. 

Therefore, it must ensure those extra resources that the Chancellor has committed to training in the construction sector is put into place immediately.  The impact of Brexit on our workforce continues to be an unknown and all of us must do what we can to encourage new recruits.  Although with the best will in the world, it will be many years before we have the workforce we need.

Stamp Duty

The abolition of stamp duty for first time buyers on homes up to £300,000 is brought into effect immediately and as developers of new homes in the North West, we do of course welcome any move that makes getting onto the housing ladder more affordable.

Land Banking

Large housebuilders will not be too happy about the review into claims of land banking and indeed shares in many volume housebuilders fell on Budget day.  The interim report on the issue is due in Spring next year and we are sure it will make interesting reading. 

The idea of a central register of planning permission is also welcome which will mean everyone can see where permissions are held and how and when they are being built out.

Is the Autumn 17 Budget a Budget for Builders?  It certainly looks like it on paper - but let’s see how it all works out in reality.