Chancellor Phillip Hammond delivered his second Budget as chancellor announcing £44billion in capital funding and loans to support the housing market over the next 5 years. Reacting to today’s announcement, Tony Bateman, Managing Director at Pegasus Group comments:
“The fact that the Chancellor made a number of announcements to support house building is certainly required, not least because the government is aiming to see 300,000 net additional homes built per annum by the mid-2020s. The £44billion being spent on housing initiatives is clearly very welcome, although I’m sure over the next few days commentators will be looking at what proportion of this had already been announced before the Budget versus what represents genuinely new funding. If you look at the 300,000 new homes target, the last time this figure was achieved was 1969. The government says it doesn’t underestimate the scale of the housing challenge, but it remains to be seen whether it is still only really tinkering at the edges when it comes to solving the housing crisis. The review of how land is being used for housing, to be chaired by Oliver Letwin, should make interesting reading, although there is speculation prior to the Budget that the Chancellor would announce a reclassification of some of the protected countryside to boost house building. However, the Chancellor emphasised his commitment to protecting the greenbelt in his Budget speech and I think this represents a missed opportunity to undertake a long-overdue review of how some of this land can be released to speed up the building process and provide homes for future generations.”
Improving transport infrastructure
“We welcome the Chancellor’s announced regarding the Transforming Cities fund to improve transport connectivity. The fact that the government is committing additional money is a positive sign, as better transport infrastructure can help boost productivity and better connect people to jobs. This can’t be a one-off announcement to try and win votes in the city regions, however, as there are still clear disparities in what different areas receive. In the North for example, IPPR analysis shows that it receives just over £400 per head on transport investment, compared to more than £1,900 per head of population in London.”
Business Rates rise capped
“Linking the business rates rise linked to the consumer prices index as opposed to the retail prices index will be well received. There is a wider debate to be had about the whole issue of business rates reform, but taken in isolation, the capping of the rise is a welcome announcement for businesses. It will lead to a potential annual saving of around £300milllion for companies and should in theory encourage further investment by firms – on expansions, new machinery and workforce development.”
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