By Ollie Sargent – Senior PR consultant
After weeks and months of leaks, build-up and speculation, the first Labour budget in 14 years has been delivered by the UK’s first female Chancellor, outlining the government’s plan to ‘invest, invest, invest.’
Since taking office, Labour has been working to manage public expectations around the economy, but one of its key growth focuses lies with the housebuilding industry. Many of us working within the sector were waiting with bated breath to see what spending commitments would be announced.
In her speech, Rachel Reeves reiterated Labour’s manifesto promise to build 1.5 million homes – a goal that has already been met with scepticism four months into the new Labour government. As a starting point, Ms Reeves was keen to emphasise the progress already made, including the launch of the National Planning Policy Framework consultation, the New Homes Accelerator, and the New Towns Taskforce.
But the money to back up these plans is what counts. So, what does the Budget mean for the housing and property market?
New funding for the Affordable Homes Programme
In the Budget, Labour committed to what it described as the most significant increase in social and affordable housebuilding in a generation. The new housing package will include £500 million in new funding for the Affordable Homes Programme, increasing it to £3.1 billion, the biggest annual budget for affordable housing in more than a decade, bringing the total investment in housing supply to over £5 billion.
Budget documents also confirmed that £3 billion will be provided as additional support for SMEs and the build-to-rent sector, in the form of housing guarantee schemes, to support the private housing market.
Right to Buy
Another notable announcement was that local authorities will retain all revenue from Right to Buy sales, allowing them to reinvest – a move likely welcomed by councils facing rising waiting lists and homelessness costs. However, the effectiveness of this funding will depend on how and when it’s distributed, as demand continues to grow at pace. Ultimately, the real impact will come down to how well the policy is actually implemented.
Additional funding to recruit and train
To help speed up planning processes, the Chancellor announced £46 million in additional funding to recruit and train 300 graduates and apprentices for local planning authorities. This aims to unblock large sites stuck in the planning system and build capacity within planning authorities to support the government’s reform agenda. However, the short-term impact of this policy on speeding up planning is questionable. With 326 local planning authorities in the UK, recruiting 300 new junior staff will barely make a dent.
Stamp duty raised
For the wider property market, Ms Reeves announced that stamp duty on second homes and buy-to-let properties will rise from three to five percent effective immediately. This additional two percent surcharge is likely to further reduce demand from second-home buyers and investors.
It’s also worth noting that there was no mention of freezing stamp duty thresholds, meaning these are still set to increase as planned from the end of March 2025.
Approval for Liverpool housing funding
In other housing-related news, Rachel Reeves confirmed £56 million to unlock over 2,000 new homes at Liverpool Central Docks, as well as a £25 million investment in a joint venture to deliver 3,000 energy-efficient homes across the country, with 100% of these set to be affordable. Additionally, £47 million in funding has been allocated to support up to 28,000 homes stalled due to nutrient neutrality requirements – a move welcomed by the industry.
Our conclusion about the 2024 Autumn Budget
Overall, there are positives in the reiteration of the government’s commitment to building more affordable homes, though many in the housebuilding industry see the Budget as a missed opportunity to reform Stamp Duty tax and introduce support for first-time buyers.
Of course, this is just scratching the surface of what was announced in a bumper Budget, which also covered everything from changes to employers’ National Insurance Contributions, draught duty, road and rail infrastructure, and additional funding for schools and the NHS, just to name a few.
Here at Cartwright, we’re helping clients across all sectors navigate these announcements and ensure they can react quickly to an ever-changing landscape. If you have any questions about what the Budget could mean for you or your business, please contact our property experts today.
