Today Chancellor Rishi Sunak will deliver his first budget after less than a month in the job. In this blog post, Capsticks summarises the key news updates and legal commentary live throughout the day.
1.30pm: The Chancellor has announced that the government is extending the Affordable Homes Programme with a new, multi-year settlements of £12bn. The length of this extension has yet to be confirmed.
1.29pm: Rishi Sunak annouces £650m of funding to help rough sleepers, providing 6,000 new homes for people to live. This will be funded by the promised stamp duty surcharge on non-UK residents, worth 2%, coming in from April 2021.
1.23pm: The Chancellor has announced £242m for new city and growth deals, taking investment to £2.7bn overall.
1.16pm: Rishi Sunak has announced the government are doubling investment in flood defences over the next six years to £5.2bn protecting over 300,000 properties—good news for social landlords who own and manage the homes affected.
12.56pm: The Chancellor has confirmed that businesses with a rateable value below £51,000 will pay no business rates this financial year. Hopefully encouraging more small business to take up commercial premises—presenting an opportunity for housing associations with commercial property units and stock if there is an increased appetite for commercial property.
12.52pm: Chancellor Rishi Sunak confirms that, during this period, the government will make it quicker and easier for individuals to get benefits. This will help support those who are self-employed, or not otherwise entitled to statutory sick pay—particularly tenants living in affordable homes across the country.
12.45pm: Chancellor Rishi Sunak confirms that the government will give the NHS "whatever extra resources" it needs during the Covid-19 outbreak.
12.03pm: In the PMQs, Boris Johnson confirms that we'll be hearing about more investment to build homes on brownfield sites to help tackle the affordable housing crisis in today's Budget.
7.30am: In advance of the Budget, the Bank of England has announced interest rates will be cut from 0.75% to 0.25% in order to help protect the British economy from the impact of the Covid-19; this will likely have limited impact for the sector. About 25% of the sector’s debt is borrowed at variable rate, which is good news for RPs, but the uncertainty in the markets at the moment because of Covid-19 is likely to have a bigger impact.
OTHER KEY UPDATES
Funds for cladding removal: Rishi Sunak has announced that a £1bn building safety fund will be made available the housing sector to remove unsafe cladding from residential buildings above 18 metres to ensure people feel safe in their homes.
Updates to the planning system: Robert Jenrick will shortly set out comprehensive reforms to modernise the current planning system. These reforms will aim to create a simpler system and improve the capacity, capability and performance of Local Planning Authorities (LPAs) to accelerate the development process.
Where LPAs fail to meet their local housing need, there will be firm consequences, including a stricter approach taken to the release of land for development and greater government intervention. The government will also explore long-term reforms to the planning system, rethinking planning from first principles, to ensure the system is providing more certainty to the public, LPAs and developers.
Brownfield devlopment: To level up all regions of the country, the Budget launches a new £400m brownfield fund for pro-development councils and ambitious Mayoral Combined Authorities with the aim of creating more homes by bringing more brownfield land into development.
Revision of PWLB terms: The government supports local authorities in local investment in part, by offering low cost loans through the Public Works Loan Board (PWLB). To address the misuse of this cheap finance, the government will consult on revising the terms of PWLB lending to ensure LAs continue to invest in housing, infrastructure and front-line services.
To further enable high quality investment by local authorities, the government is cutting the interest rates for investment in social housing by 1 percentage point, and making an extra £1.15bn of discounted loans available for local infrastructure projects.
Property tax: The government will introduce a 2% Stamp Duty Land Tax (SDLT) surcharge on non-UK residents purchasing residential property from 1 April 2021. This will help to control house price inflation and to support UK residents to get onto and move up the housing ladder.
To make the taxation of housing co-operatives fairer, the government will introduce a relief for qualifying housing co-operatives from the Annual Tax on Enveloped Dwellings (ATED) and the 15% flat rates of SDLT on purchases of dwellings over £500,000. The SDLT relief in England and Northern Ireland will take effect from Autumn Budget 2020 and the UK-wide ATED relief from 1 April 2021 with a refund available for 2020-21.