Ten things you might have missed in George Osborne’s budget this week
1. Boost for self-build sector
Would-be self-builders and custom build buyers had good news with plans for a £150m Serviced Plots Loans Fund to help deliver up to 10,000 serviced building plots, where councils will work with contractors or builders to access the fund. People will also have a new “Right to Build” – whereby they can challenge local authorities to provide suitable plots for self build.
The Homes and Communities Agency says that government will be seeking a small number of councils to act as vanguards to test the model.
Also, as part of the extra £6bn the government is providing to extend the Help to Buy scheme, it is exploring ways that would allow self builders to qualify for a 20% equity loan.
Andy Frankish, new homes director at the Mortgage Advice Bureau said: “The announcement of a £150m custom build initiative is a ground breaking move that will extend the Right to Build to balance the success of Help to Buy. It is a huge boost to have government throwing extra weight behind the custom build industry.
2. Freeze in aggregates tax welcomed
The Mineral Products Association told Construction News that a freeze in aggregates levy announced in the Budget would benefit contractors.
The Mineral Products Association said that increased costs that would have been incurred by their members in 2014/15 will now not be passed on to contractors.
According to Treasury figures, the tax rise would have cost about £25m had it gone ahead, which is £5m a year from 2014/15 for five years. Instead, the aggregates levy rate will remain at £2 per tonne in 2014/15.
The Treasury said cement manufacturers would now be able to benefit from help for energy intensive manufacturers with their bills.
3. £200m Potholes Challenge Fund
The Budget document said the potholes challenge fund for 2014/15 would enable councils to repair up to 3.2 million potholes, with councils bidding for the money in a competitive process, which was criticised in The Guardian.
Steve Kent, president of the Association of Directors of Environment, Economy, Planning and Transport, whose members include council highways chiefs, was less-than-overwhelmed when he spoke to Construction News. “It is welcome, of course, but for the last three or four years we have had about £100m at this time of year after severe weather. It is helpful but it will not go a long way to address the underlying condition of the road network.”
4. Further change of use reforms proposed
In a move highlighted by www.planningresource.co.uk, the government announced that it would consult on new rules to allow warehouses and light industrial buildings to be turned into homes without planning permission. The move will be part of a review of the General Permitted Development Order, with the intention of further streamlining the planning system.
The move was welcomed by Mark Dodds, head of national planning and development at property firm Lambert Smith Hampton. “The possibility of a further relxaxtion of the rules will be welcomed by the industry,” he said. He told City AM that applications for conversions of offices and shops to homes had risen 500% since the changes were introduced last May.
5. Funding boost for Greater Cambridge
The Budget says that the government will commit £100m to Greater Cambridge over five years to 2019/20 to “support their ambitious transport and infrastructure proposals through a Gain Share mechanism”. This is also known as a “city deal”, rewarding the Cambridge area for improved economic performance. The money will be used, according to the Cambridge Evening News, to “bankroll massive investment in public transport and cycling links, in a bid to stop the city grinding to a halt as thousands of new houses are built”.
6. Help to Buy extended until 2020
The equity loan scheme will be extended to March 2020 with an extra £6bn to help a further 120,000 households purchase a home, while the Help to Buy mortgage guarantee scheme will end as planned in December 2016.
Barratt Developments responded by saying it would increase the number of sites it is working on from the current 380 towards 450 and that the number of people employed on its sites (including subcontractors) would increase to approximately 21,000, up from 18,000 at the end of 2013. The increase comes on top of the 3,000 jobs that the company says it created in 2013 as it stepped up the number of homes under construction.
Simon Rubinsohn, RICS chief economist said: “The much trailed extension of Help to Buy to 2020 is not a game changer. While it provides certainty and clarity to the market, creating another 120,000 new build properties is still a modest target. We need over 230,000 just to meet current demand. Much more needs to be done.”
7. £150m load fund for social housing estate regeneration
According to Inside Housing, the budget document said bids will be invited “shortly” from councils, housing associations and private sector developers, and there have already been expressions of interest from the Greater London Authority relating to the Aylesbury Estate, Blackwell Road and Grahame Park regeneration projects. The Homes and Communities Agency says that funding is available from 2015/16 to 2018/19 with repayment expected over 15 to 20 years.
Tonia Secker, housing and regeneration partner at law firm Trowers & Hamlins, said: “The chancellor has referred to the establishment of a £150m fund to kick-start the regeneration of large housing estates through repayable loans from private sector developers. It’s unclear as to what aspects of estate regeneration the fund is intended to address, and we look forward to seeing the detailed proposals for this area of housing, which has struggled to receive investment in recent years.”
8. £170m to extend the Apprenticeship Grant for Employers scheme
This scheme offers SMEs with fewer than 50 employees grants of that have not taken on an apprentice in the past year are eligible for £1,500 in support for new apprentices. According to the Times Educational Supplement, between February 2012 and October 2013 49,300 grants were made, with a further 19,000 in the pipeline.
The new funds will cover around 100,000 new starts and will be available from January 2015.
9. Extra £140m for repairing flood defences
In the wake of this year’s deluge, George Osborne made more money available for flood defences, but critics said it still fell short of the totals recommended by independent advisers.
Mark Robinson, group chief executive at Scape, responded to the this news, and the £200m to repair damaged roads, by saying: “We are introducing our new infrastructure/civil works framework which means we will be well placed to support local authorities to tackle issues such as flooding and potholes as efficiently and cost-effectively as possible.
“With plans for austerity measures remaining in place through to the end of the next Parliament, we will ensure we help public sector bodies to deliver greater efficiencies from their capital programmes.”
10. Radical liberalisation of pension rules
The British Property Federation has welcomed the reform to pensions, saying that the freedom that will be granted to those spending their pension pots holds great potential for the property industry. Investment in bricks and mortar, either directly or through funds, will boost the industry and help to encourage growth.
Other commentators said that the move was in fact likely to fuel the purchase of overseas homes by retirees, but that this could have the beneficial effect of releasing more family properties on to the UK housing market.