1. £3bn per annum additional investment in infrastructure projects from 2015/16 has been found by squeezing other areas of departmental spending.
Colin Wilson, partner in the finance and projects group at law firm DLA Piper said: “The government’s continued commitment to investment in large-scale infrastructure projects, as evidenced by the £3bn a year increase in spending from 2015/2016 is encouraging to see. The UK needs world class infrastructure to boost the economy. To ensure that this can be delivered the government’s spending commitment must now be followed up by a concerted focus across government on the deliverability of these projects.”
2. Confirmation that the zero carbon homes target will apply from 2016, a move applauded by the UK Green Building Council.
Paul King, CEO of UK-GBC, said: “George Osborne’s re-commitment to zero carbon homes from 2016 is the one shining green beacon in today’s Budget. The fact that it’s there is welcome and important, but it looks very solitary in a Budget otherwise devoid of support for green growth, with even the government’s flagship Green Deal failing to get a look in.”
3. The Help to Buy scheme Part 1: from April all buyers of new homes up to £600,000 will benefit from £3.5bn of capital spending to support shared equity loans of 20% of the value of the new homes, with the buyer raising a 5% deposit.
Richard Threlfall, KPMG’s head of infrastructure, building and construction said: “By opening the scheme to all buyers of new-build houses up to £600,000 in value, the chancellor has thrown the UK house building industry a new lifeline. Ultimately, the construction industry and all trades that support construction of new houses in the UK will benefit from the new scheme.”
4. The Help to Buy scheme Part 2: from January 2014 for three years, buyers of new and second hand homes will be able to buy with a low deposit backed by a new government mortgage guarantee scheme for up £130bn in mortgage funds.
Jonathan Hook, engineering and construction leader at PriceWaterhouseCoopers, said: “For construction, the big news for the sector is the chancellor’s bet on the housing market with the Help to Buy scheme. The commitment of £3.5bn to shared equity loans up to 20% coupled with £130bn of mortgage guarantees is a big boost to the residential market. The chancellor obviously believes this a quicker and cheaper way to get an economic boost than other areas of capital spend.”
5. An announcement on a consultation about removing planning controls on retail-to-resi conversion projects.
Liz Peace, chief executive of the British Property Federation, said: “Retail-to-residential conversions could be an important step in breathing life into our high streets, and we would very much encourage a flexible approach, particularly in areas with increasingly obsolescent retail stock that is unlikely to be brought back into retail use.”
6. The chancellor said he was actively considering extending funding for the Funding for Lending Scheme (FLS) to help SME businesses.
In a statement, the RICS said: “We would urge him to act now. We are confident that an extension of the FLS would assist more would-be homeowners and small businesses. While the FLS has been a key part of the beginning of improving conditions in the housing market, it’s hardly surprising that banks remain more willing to lend on residential mortgages rather than small businesses. Government needs to take a long hard look at the FLS as small businesses are the engine of the UK’s economic recovery.
7. The government is to explore “streamlining the planning process” to make it easier to build new Thames river crossings.
Duncan Symonds, UK head of infrastructure at global consultancy WSP, commented: “Commitment to commence construction of the Lower Thames Crossing before planning powers have been secured is a bold statement from the government and this is exactly the sort of leadership the industry needs to see more of. These kinds of assertions will give investors the confidence to invest.”
8. Corporation tax will fall to 20% in 2015.
John Cridland, director general of the CBI, said: “An extra one penny cut in corporation tax will also make the UK one of the most internationally competitive locations in which to do business.”
9. An increase in funds available for build-to-rent schemes, from £200m to £1bn, to increase to support construction of new rental property. The initial £200m opened for bids in December and was heavily oversubscribed.
Ian Fletcher, director of policy at the British Property Federation, said: “It’s encouraging the government’s confidence in build to rent has been reciprocated and we are delighted to see that the equity funding was heavily oversubscribed. Working in partnership with government the sector should deliver an exciting and quality array of homes for renters.”
10. Additional funding for Local Enterprise Partnerships (LEPs) to help unlock local growth, in line with Lord Heseltine’s No Stone Unturned report, although there were no details on the level of funding available.
Dr Nelson Ogunshakin OBE, chief executive of the ACE, said: “Local Enterprise Partnerships (LEPs) have brought together an excellent array of stakeholders, including universities, local authorities, employers and developers. However, until now the finance available for the LEPs has been restricted and this has hindered their progress in generating growth locally. Industry, which has been keen to engage, will be pleased to hear that government is investing.
But there were plenty of worrying omissions too, including:
1. No plans to allow local authorities to borrow more to fund the construction of new homes.
Ben de Waal, head of residential at Davis Langdon, said: “Disappointing that there was no mention of local authority debt caps being raised to help them fund new homes. Clearly the impact on the UK balance sheet is considered to be too great but it ignores that from a delivery point of view the local authorities are very well placed to fund a major programme of new housing on land already within their ownership.”
2. For the umpteenth time, the argument that VAT should be cut on domestic repair and maintenance projects fell on deaf ears.
Brian Berry, chief executive of the FMB, said: “More than three-quarters of our members recently told us that the most important thing the government could do to revitalise the home repair, maintenance and energy-efficiency markets would be to cut VAT. This would also provide a level playing field when competing with builders who choose to avoid charging VAT.”
