“Invest! Invest! Invest!” was the mantra ringing out from Westminster during last week’s Autumn Budget.
As viewers across the UK curiously perched over laptop screens and eagerly craned their necks towards TVs while scarfing down their midweek sandwiches, Chancellor Reeves sprinted us through a marathon budget.
Now that we’ve had the chance to catch our breath, Associate Planner Alex Egge looks at some of the key announcements and how they might impact the planning and development sector:
Planning and housing
The Chancellor re-iterated the government’s commitment to building 1.5m homes in this parliamentary term and supporting the planning system through £46 million for the recruitment of 300 additional planners.
Commitments also included:
- An increase in the Affordable Homes Budget of £500 million (bringing overall government spending on housing to £5 billion) to deliver 5,000 additional affordable social homes;
- Providing £3 billion to support SME housebuilders and Build to Rent developers to access lower-cost loans;
- £47 million to support developers to deliver homes which are currently stalled due to nutrient neutrality issues;
- The reduction of discounts on Right-to-Buy properties and the return of all sales revenue to local authorities;
- The allocation of £1 billion for the removal of unsafe cladding next year.
Alex comments: These measures help flesh out some of the much-anticipated detail for how the government will implement commitments to support the planning system and delivering affordable housing. However, we are still waiting for the all-important detail of how these funds will deliver the promised changes in practice and the ways in which they can be accessed.
In particular, the sourcing of 300 additional planners is yet to be detailed at a time when we see local planning authorities hampered by significant under-resourcing and ongoing departures of planners from the public sector.
Education
As anticipated, the Chancellor confirmed the election manifesto commitment to introduce the standard 20% VAT rate onto private school fees from 1st January 2025. She also announced £6.7 billion for investment into state-funded education, with £1.4 billion allocated for school rebuilding/refurbishment.
Alex comments: Announcements on education indicate that private schools may find themselves needing to offset the additional VAT costs through tuition increases and/or estate reconfiguration, while state-funded schools stand to benefit from additional funding to improve facilities. In either case, many educational institutions will be considering how their estates may need to evolve in the coming years.
Transport
Announcements regarding transport included the extension of the bus fare cap in England to December 2025 (although rising from £2 to £3) as well as further support for EV adoption and extending the freeze on fuel duty.
Reeves also announced support for major regional rail upgrades, including station refurbishments, capacity improvement and electrification. This also included the commitment to fund the tunnelling for HS2’s southernmost stretch between Old Oak Common and Euston with the intention of attracting private investment to fund the construction of Euston station.
Alex comments: Announcements relating to transport illustrate the balance between investment and pragmatism which characterises many of the elements of the budget. For example, while the government won’t be funding Euston station, it will fund the required tunnelling and while the bus fare cap is being extended, it is also rising.
From a development perspective, regional rail seems to be the story of the day with projects announced throughout the country to make smart and strategic transport links with the aim of unlocking development in key locations.
Capital Gains and Stamp Duty
Announcements regarding Capital Gains Tax increases were largely predicted ahead of the budget’s official announcement and did not include increases on the rates paid for property sales. However, no mention of an additional Development Land Tax after months of swirling rumours is likely to be a relief to some landowners considering selling to enable development.
The budget also introduced an increase in the rate of Stamp Duty Land Tax levied on additional properties (or any property bought by a company) from 3% to 5%.
Alex comments: While these measures are unlikely to directly impact most people, it is worth bearing in mind the ways in which these tweaks to tax levels could inadvertently incentivise or disincentivise development and land/property transactions.
Now that we know the numbers and commitments, we eagerly await the detail of how, when and to whom these allocations will be distributed over the coming months and years.