PHPD collects reactions from across the industry to Chancellor Rishi Sunak’s budget. This post may be updated as more comments come in.
CEO of Gleeson Homes James Thomson – private developer of affordable housing in the North and Midlands said:
“Given the Government is rightly committed to generating greater prosperity and opportunity in the North of England, making home ownership a reality for people on low to moderate incomes must be front and centre of its domestic policy agenda.
“Homeownership can be genuinely transformational in changing lives and cuts across all socio-economic backgrounds. The aims of the Government’s First Homes policy are to be applauded in helping first time buyers, but the detail must be carefully thought out. It is crucial that the viability of developing new homes is properly considered within the planning and development process to facilitate much needed delivery for this market.”
Richard Donnell, Director of Research & Insight at Zoopla comments:
On the overseas stamp duty surcharge – Dollar buyers will be least affected
“The additional 2% Stamp Duty surcharge for non-UK resident buyers represents the latest in a long series of tax reforms, and may have a short-term impact on demand in higher value markets once it is introduced. For those who are looking at a longer-term hold, the additional upfront purchase cost will diminish in significance over time.
“In the interim, however, there will likely be some increased activity among non-UK residents looking to purchase before the new rules come into force.
“Dollar-denominated buyers may find that the additional cost is partly offset by currency movements, with an effective discount of more than 20% for those buying UK property now compared to the summer of 2014 – purely due to movements in the pound.
On the lack of stamp duty reform for UK residents – Stamp duty has become a Southern Tax
“With SDLT lining the Treasury’s coffers to the tune of £8.3bn as of March 2019, up from £2.7bn ten years’ ago, it was always unlikely that the Chancellor would consider a significant Stamp Duty reform – particularly without an alternative source of revenue.
“Stamp Duty has become a Southern tax, and is widely regarded as one of the biggest inhibitors to market liquidity in London and the South East – from which 61% of SDLT receipts are generated. In keeping the tax bands unchanged and not in line with price inflation, 2.7m homes have been pushed into the 5% band since 2015.
On the Bank of England’s interest rate reductions:
“The reduction in the Bank Rate will benefit homeowners on variable rate mortgages; however, these represent a minority with over 90% of new mortgages now fixed rate.
“For those on variable rates, it normally takes up to two months for the change in Bank Rate to filter down, but the Government will put pressure on financial institutions to implement it faster.
“It’s important to remember that it is up to the Banks’ discretion as to how much of the cut they pass on to consumers, which could stymie potential benefits.”
On the business rate reductions for smaller businesses:
“Additionally, we welcome the abolition of business rates for small businesses for the year ahead, which we hope will benefit the financial health of SME high street agents.”
Brian Berry, Chief Executive of the Federation of Master Builders (FMB) said:
“Understandably, the Chancellor has delivered a ‘first aid Budget’ to overcome the short-term crisis caused by COVID-19. But he has missed an important opportunity to announce interventions that would support the sustainable, long-term recovery construction needs. The autumn Budget must include measures to cut VAT on repair and renovation, and a National Retrofit Strategy to promote decarbonisation and create jobs and growth.”
Commenting on measures to support businesses dealing with COVID-19, Berry said:
“Builders are increasingly concerned about the impact COVID-19 will have on their businesses. Today’s package of measures to support SMEs through refunding Statutory Sick Pay, making temporary loans and grants available, and support for the self-employed will provide welcome relief to small building businesses and their workers alike.”
On red diesel, Berry continued:
“While we understand the need to move away from red diesel in the long-term, it is unfair that construction should no longer be exempt while agriculture remains so. Construction contributes 9% to GDP and employs 2.7 million people, which does not appear to be recognised by the Chancellor. He must prioritise the development of a low-cost, low-carbon alternative to support SMEs of all sectors to tackle the climate crisis. Otherwise, the Chancellor is giving with one hand to SMEs and taking with the other.”
On housing, Berry concluded:
“An investment of £13.7 billion in housing is welcome news, however, there was no mention of how the Government plan to support SME house builders. Master Builders are facing major barriers finding land, accessing finance and skilled workers – these will all need addressing if we are to build 300,000 homes a year.”
Mike Flecknoe, a partner with global real estate consultancy Cushman & Wakefield, said: “The temporary 2020/21 rates reliefs announced for the retail, hospitality and leisure sectors, together with the additional support for pubs valued below £100,000 and additional funding for those small businesses in receipt of small business relief are to be welcomed given the likely short term economic impact of the coronavirus.
“However, it is disappointing there was no business rates support in this budget for large business, even those occupying multiple lower value properties given the impact of State Aid Rules, nor other sectors outside retail, leisure or hospitality.
“The Chancellor did announce that the promised fundamental review on business rates will take place but will not report until the Autumn. It is a pity that he did not use this opportunity to scrap downwards transition to assist all those ratepayers paying artificially high rates.”
Guy Harrington, CEO of property lender Glenhawk:
“Confirmation of this additional surcharge, which will materially impact the top end of the market in particular, a valuable source of income for the treasury from all over the world, appears misguided. The Chancellor’s focus should be on measures that will stimulate the housing market and support current and potential homeowners right across the pricing spectrum and, just as importantly, in all parts of the UK.”
Commenting on the Stamp Duty surcharge for foreign buyers announced by the Chancellor today, John Phillips, national operations director at Just Mortgages said:
“A surcharge for foreign buyers of residential property is something I have argued in favour of for a long time, so it would be churlish for me to criticise it. But what is needed alongside that is a reduction in Stamp Duty elsewhere.
“As the Institute for Fiscal Studies has said, Stamp Duty is a tax on transactions, pure and simple, which freezes up the market and means people don’t get to live in homes that meet their needs.
“This Budget is being delivered in unexpected and extraordinary circumstances so it is understandable that the Chancellor may not see this is a priority. I hope that he will revisit the issue once Covid-19 is under control, in line with the promises previously made by the Prime Minister.”
Paul Howells, CEO of Accumulate Capital
“From the housing crisis through to infrastructure investment and reforms to tax measures affecting landlords, the 2020 Spring Budget had a lot to live up to. While the coronavirus was a big talking point, it was refreshing to see the Government beginning to address some of the issues affecting the property market which have so far been neglected.
“Regional regeneration has the propensity to deliver many long-term benefits for the economy, so it was pleasing to see the Government committed heavily to investing in the regions. The Government’s commitment to constructing more homes is equally promising, though as someone closely involved in the construction sector, I do question whether its current objectives are achievable.”
Paul McGerrigan, CEO of Loan.co.uk
“I was happy to see property feature prominently in today’s budget. The Government is clearly keen on maintaining surging interest in bricks and mortar by reforming Stamp Duty so that first-time homebuyers in the UK are in an attractive position to buy a property.
“With interest rates at record lows, first-time buyers have a wealth of mortgage options to choose from; in this tricky economic environment, the challenge is finding a mortgage solution best tailored to their needs and circumstances.”
Jamie Johnson, CEO of FJP Investment
“When news that the £100 billion national infrastructure strategy would not be announced as part of the 2020 Spring Budget, one could not help but be sceptical about what the Chancellor would ultimately deliver in today’s speech. Fortunately, the budget provided assurances and a vision many of us in the finance sector were hoping to see.
“The Government is clearly committed to ensuring the UK remains a thriving hub for international and domestic investment. Rather than letting the immediate concerns over coronavirus overshadow the speech, Boris Johnson’s government has announced a budget that hopes to maintain the positive surge in investment activity following the 2019 General Election result. Make no mistake – this budget is not a spending spree trying to win votes. It is a budget which is laying down the long-term foundations for the UK to thrive over the coming years.”
Paresh Raja, CEO of Market Financial Solutions
“Finally, a budget to be excited about. Unlike previous Government announcements, today’s speech finally offers the assurances so many in the property market were hoping to see, particularly in terms of infrastructure investment.
“While the imposition of a Stamp Duty surcharge for overseas buyers was expected, I am hopeful that the UK’s attractiveness as a destination for investment will mean this reform will not deter international buyers of UK real estate.
“The real challenge now is for the Government to introduce and monitor the outcome of these reforms. Making bold policy statements is one thing, but following through on these is another challenge altogether.”
Victoria Hills, chief executive of the Royal Town Planning Institute (RTPI), has responded to the 2020 budget:
“We welcome the spending commitments on infrastructure in this budget. There is an urgent need to upgrade much of the country’s existing infrastructure so we can reach net zero carbon, respond to growing environment risks such as flooding and overheating, accommodate population and demographic change and enable sustainable development of residential, commercial and industrial space.
“Planners are essential for ensuring timely delivery of places that meet the needs of the community. Without planners or adequate planning systems and policies, there is no realistic way to progress to zero carbon. The Government’s own advisory body, the Committee on Climate Change, recognises the role of planners in taking decisive and effective climate action. ”
“The RTPI also welcomes the £12 billion affordable housing programme announced in the budget and the 1% interest rate cut on councils borrowing to build homes.
“We also welcome the £242 million of funding for new City and Growth Deals and believe these should be used to incentivise strategic planning for housing.
Ms Hills welcomed the announcement of increased devolution for West Yorkshire which will now become a mayoral combined authority, giving it increased powers to lead on strategy for regional transport, skills training and economic development.
“The RTPI has long been calling for increased devolution and coordinated decision-making across local authorities to enable better alignment of homes, transport and other infrastructure to deliver for communities. This is also essential in meeting net-zero carbon targets,” said Ms Hills. She also welcomed the announcement of a ‘north campus’ for the civil service.
She welcomed the chancellor’s announcement that £5.2 billion would be spent on flood and coastal defences over the next six years.
“Flooding defences have to be coordinated across local authorities and must form part of the strategic planning powers at regional level. Overall this is a growth budget and the RTPI’s members look forward to supporting delivery of it.”
Rob Barnes, director at structural and civil engineering practice Perega:
“The government’s commitment of £400m to encourage building on brownfield is to be welcomed. For too long this issue has been on the back burner and it’s high time we made use of the perfectly good land which exists within our urban areas but has not been utilised. I think it dovetails nicely with the commitment to build an extra 70,000 homes in high-demand areas, representing a more strategic approach to housebuilding and construction, something we have not seen from our policy makers for a number of years.”
“The push towards improving our infrastructure is encouraging, particularly roads and rail networks, but I’ll be interested to see how this sits alongside commitments to meeting our 2020 net-zero carbon targets. In my opinion, I think it’s going to be very much a case of one or the other, down the line, something will have to give.”
Budget 2020 reaction from Kersten Muller, Partner Real Estate and Construction, at Grant Thornton UK LLP
“Today marked the Prime Minister and Chancellor’s first budget. As expected, a number of the announcements played towards the “levelling up” agenda trailed in the Conservative Party manifesto – the focus on investment into infrastructure, transport and housing. The range of focus included the building safety fund, significant additional funding for affordable homes, building on brownfield sites, 40 hospital projects and the fund to build new roads and maintain existing ones.
“The investment is undoubtedly needed and there is a significant opportunity to unlock even more funding from institutional and private investors to joint venture with the public sector. The initiatives to provide additional key worker and affordable housing are again laudable but a key question remains on how the additional homes will be delivered; there was no mention of investment into alternative delivery models (including Modern Methods of Construction for instance). At a time when the country is struggling with the required skills and potential disruption to supply chains, this has to be a key focus.
“There are some focussed tax measures, such as the extension of the structures and buildings allowance to 3%, which will further encourage investment into “bricks & mortar”.
“An announcement on Business Rates was widely expected…and help was offered for smaller businesses. We are very much in support of a fundamental review into the future of business rates and believe that this should have clear focus on the way businesses use property in the 21st century.”
Rob Oliver, CEO of Construction Equipment Association
Rishi Sunak’s first budget statement was rightly underpinnedby action to address coronavirus crisis concerns – something that has an immediate effect on lives and livelihoods. Beyond this there were some good and bad aspects for the construction industry.
Short term measures
The estimated one million small businesses that serve the UK construction industry will receive some welcome short term relief on sick pay obligations and business interruption loans. We don’t yet know, of course, if this will in any way compensate for the possible scale of business disruption over the next few months.
Infrastructure investment
The announcement of £27 billion of investment in the country’s strategic roads network was most welcome – and we will look forward to seeing the detail of this. In his closing remarks, the Chancellor recognised that there was more work to do on the national infrastructure strategy. As recently witnessed over the legal block to the Heathrow expansion, the government refused to support a key infrastructure project.The full promised investment could get delayed or watered down by planning or court constraints unless government really commits. A good opportunity to “get it done”.
Red diesel tax concession to go in 2022
The Chancellor was entirely selective with his statistics in suggesting that off-road red diesel users were responsible for 10% of air pollutants. Ironically, motor vehicles, as the much bigger polluters, will face no tax hike and drivers will continue to pay about 10% less for their fuel compared to the start of the year. The CEA is justifiably proud that its members have reduced harmful engine emissions by over 90%, which coupled with improved fuel consumption is a “green” success.
Government has promised to consult on the application of this tax change and the CEA looks forward to being part of this process, particularly in support of plant hire companies and contractors who will be alongside us in delivering the promised infrastructure revolution.
Richard Hyams, Founder and Director of London-based architecture firm astudio
“Our team at astudio is extremely pleased to see the chancellor committed to investing a further £12 billion in the affordable homes programme.
The concerted effort to tackle the UK’s housing crisis is commendable, though the fact that one third of local authorities failed to meet their housebuilding targets last year is a clear demonstration that more needs to be done. If we are going to realistically address the long-term challenges posed by the crisis, we need to see not only greater budgetary support, but also a cross-party initiative which goes above the election cycle and fosters greater partnerships with those both in the public and private sector.
Meaningful progress towards housing affordability as well as carbon neutral goals set by the London Energy Transformation Initiative (LETI) and the Royal Institute of British Architects (RIBA), can only be made if they are supported by an advisory committee which sees beyond party administrations and plans beyond the next few years, even the next few decades, for a future where the UK is affordable, accessible and carbon neutral.”
David Bowen, CTO of Logicor heating systems
“Of course, the outbreak of Coronavirus has had a significant impact on the Budget’s content. However there were some interesting takeaways, particularly the removal of the red diesel subsidy.
“While there have been outcries from the construction and shipping industries, highlighting the significant costs it will place on haulage, this move is hardly surprising as this Government has been making increasingly louder policy signals in this direction.
“Phasing out fossil fuels has become a key priority, especially if we want to come close to hitting our 2050 Net-Zero targets and this is just one way to get that step closer. People should be more surprised the Chancellor hasn’t gone even further, given the concerning report published by Energy Systems Catapult earlier this week.
“Construction, housebuilding and product manufacturing are some of the largest carbon emitters and this needs to be urgently mitigated, or reversed, otherwise any attempt to achieve our targets will be a hiding to nothing. I think giving two years to convert from ICE to EV shipping/haulage is a generous timeframe.
“Looking ahead, we would like to see a much greater emphasis placed on climate change and manufacturing. We don’t feel the general public are currently financially incentivised to choose products that are kinder to the climate, without that no change will take place (certainly not at the speed needed). For example, it’s difficult to see how the general public will move away from fossil fuel heating systems when they appear to be so cheap, on a unit price basis, compared to others fuels. We all know what the consequences are if we don’t make the move yet, we seem to be taking a long time to make a decision and when a decision is made there is always a time delay to implementation, often measured in years rather than months. Is time a luxury we actually have or are we building ourselves up for a mad scramble in a few years’ time? I don’t think the Government has really seized the opportunity to present the radically policies we urgently need.”
“Furthermore, ‘green’ infrastructure is another problem this budget addressed in a very cursory way. Clearly we are heading towards more and more electric vehicles inhabiting our roads. That’s a good thing but, where is the infrastructure coming from, who’s paying for it and when will be ready for use?
“This is a problem of two sides. First, there is generation of energy and second, getting the energy from the point of generation to the point of use. Do we really think we can cover off both sides with our current levels of spending? Is one side of any real use without the other? Our current electrical infrastructure simply can’t keep pace with the EV rollout, so what happens when you can’t charge your car in the evening and can’t get to work in the morning? Everyone wants to see lots of EV cars on the road but, without funding, and at a really large level, is it possible to achieve a fast EV rollout or a change from fossil fuels to greener energy burning heating and hot water systems?”
Russell Gardner, EY’s Head of Real Estate and Tax Partner
“In his first Budget, the Chancellor found space to commit to a huge increase in publicly funded construction works. But the housing crisis appears to have moved down the agenda for now. There is significantly more funding but no radical new measures announced to tackle our housing shortage. Perhaps tomorrow’s announcements on planning reform will be more meaningful.
“The Chancellor was unable to resist the temptation of a Stamp Duty Land Tax surcharge for overseas buyers. Despite this being a measure that successive Chancellors have used to play to the crowd, there is little evidence of it doing anything to address our housing problems.
“While we heard about a planned consultation on a fundamental review of business rates, this was pushed to the Autumn. Instead, the key announcement for the real estate industry was a set of short-term emergency measures, relieving the business rates burden for those businesses most likely to be impacted. The major change to business rates that retailers have begged for was deferred, leaving some of the high street still on life support.”
Ramsey Assal, CEO of The Landsite.
“Our new Chancellor has delivered an impactful budget at one of the most difficult times in my living memory, as the UK faces completing its exit from the EU, the aftermath of some of the worst flooding we have known and now the worldwide concerns over Coronavirus.
“Despite these significant issues I was impressed that Chancellor Sunak delivered several important pledges for the property market. The Mayor’s fund of £400m spells excellent news for developers, this will open large swathes of land and promote construction in the UK.
“I was particularly heartened to hear the Government will be tripling the investment into road and rail. Yet again this move aids the construction industry and will boost the economy throughout the UK.”
Ed Monaghan, Mactaggart & Mickel Group CEO
“So much had been spoken about in the past few weeks on how our new Chancellor would set the tone for Boris’ levelling out agenda.
“We welcome the government’s focus on regional growth, set out in its additional funding support for Scotland. The funding for much need affordable housing and assistance in the removal of combustible cladding is also most welcome.
“Previous PM Harold Macmillan famously shared what worried him as being; ‘events dear boy, events’. Seldom has that quote been quite as relevant as in today’s Budget and government policy.”
Chris Stanley, Housing Manager at the Concrete Block Association
“We welcome the government’s commitment to big infrastructure, as it provides a welcome shot in the arm for the construction industry, which is starting to resurge following a turbulent few years. We urgently need to tackle issues such as housing, connectivity and local economies. These big projects, particularly a strategic plan to address our ageing road and rail networks, offer a catalyst which will hopefully drive activity to address these.”
“However, looking beyond these statements, I fear that further investment of in vogue but unproven construction techniques and lack of support for existing methods/production will continue. It’s a huge disappointment for many established housebuilders, contractors and core building product manufacturers, many of whom provide significant economic benefit and employment opportunities across the UK.”
“Many of our members continuously invest in developing their production to increase output, reduce manual handling and increase efficiency, all with limited or no financial backing from the government. Some of our members have expressed caution towards investing any further, as there appears to be no guarantee that Masonry is on the government’s construction and housebuilding agendas. Fundamentally, all members would happily invest if Masonry was on the agenda alongside other construction materials. Going forward, we need parity and clarity from government on this.”
Ian Baker, managing director of award winning south west housebuilder Baker Estates
“Overall it looks like a comprehensive budget which pledges to invest a considerable amount (£640bn) into the country’s infrastructure over the next five years which can only be good for housebuilding down the line.
“It also sets out intentions to cut public sector loans to local authorities and housing associations to help build more affordable homes. But let’s not forget it’s the private sector who builds the lions’ share – around 50,000 affordable homes every year in the UK through section 106 agreements. This is significantly higher than the public sector.
“If the chancellor wants to deliver more affordable homes, measures around improving the planning system would be welcome and we are hoping to hear more detail on how the Housing Minister is going to achieve this tomorrow to bring ‘the planning system into the 21st century’ as the chancellor stated.”
Stuart Gibbons, regional managing director, Lovell London
“As expected, the budget was overshadowed by measures to combat the coronavirus and overall, the chancellor’s fund of £30bn will give UK businesses confidence they’re not being forgotten over this tough period.
The chancellor’s pledge to ‘Get Britain Building’ is a welcome one and £640bn to be spent in UK infrastructure over the next five years is a bold commitment.
There’s over £12bn set aside for an affordable homes programme and almost £1.1bn of allocations will be made to build almost 70,000 homes in high-demand areas which again we support.
We are pleased to see public sector loans cut by 1% to local authorities and housing associations to help build more affordable homes across the country.
We will be looking forward to reading about the planning reforms to be set out by the Housing Minister.”
