The Government will pump an additional £9.5bn into the UK’s Affordable Homes Programme over the next five years, taking the total settlement to £12.2bn to hit a national target of delivering one million homes by the end of the period.
Chancellor Rishi Sunak said the decision to expand the Affordable Homes Programme was the “largest cash investment in affordable housing in a decade”.
The Goverment will also invest £1.1bn from the Housing Infrastructure Fund with the aim of bringing forward 70,000 homes across nine areas of the country, including in Manchester and South Lancaster.
And it pledged an additional £1bn to remove all types of unsafe cladding from private and social residential buildings over 18 metres tall, as a further response to the Grenfell Tower tragedy in 2017. This is in addition to the £600m fund already available to remove specific aluminium composite material cladding from high-rise blocks.
Other investments to boost housing, outlined in the Treasury’s budget for 2020-2025 on Wednesday afternoon, include:
- A 1% cut in interest rates for investment in social housing to encourage further investment by local authorities
- Total funding of £400m for “pro-development Mayoral Combined Authorities” to develop housing on brownfield land in the hope of levelling up the regions
- A new long-term Single Housing Infrastructure Fund to unlock new homes in areas of high demand
- A 2% stamp duty land tax surcharge on non-UK residents purchasing residential property in England and Northern Ireland from 1 April 2021 to help control house price inflation, with the proceeds used to address rough sleeping. The surcharge has been reduced from earlier proposals for a 3% surcharge for overseas buyers
Reactions from the industry
Nick Whitten, head of UK Living Research at JLL, said: “The additional funding for the Affordable Homes Programme is particularly welcome as part of the levelling-up agenda and providing homes for those who need the most housing support.”
“The change in the rate of Stamp Duty for international investors was anticipated as part of the Government’s priority to ‘level up’ the distribution of wealth in the UK. However, it is vital to strike an appropriate balance in meeting this priority and enabling international investment.
David Westgate, chief executive at Andrews Property Group, said: “The announcement of a £1bn Building Safety Fund will be welcomed by leaseholders living in high-rise blocks around the UK.
Hew Edgar, head of the RICS’ UK Government & City strategy, said: “Delivering green, new housing required an ambitious approach to VAT – not superficial tweaks to stamp duty – so we’re disappointed the Chancellor didn’t support the property industry to retrofit thousands of buildings, turning them into places people would have loved to call home.”
Julie Hirigoyen, chief executive at UK Green Building Council, said: “Just days ago, the Chancellor billed today’s Budget as one which would be about reaching net zero and protecting our environment. Clearly that did not ‘get done’.
“Unfortunately, notably absent from the budget documents [related to housing] are the Government’s three biggest manifesto promises on energy efficiency: The social housing decarbonisation fund, Home Upgrade Grants and the Public Sector Decarbonisation scheme.
“There was plenty of talk about homes in today’s speech – but no promise that they will help achieve net zero or be affordable to run.”