Autumn Statement and Spending Review: Highlights for planning and development
Following on from our July blog based on the Summer Budget, the yellow pine and brass handled Budget Box (i.e. the red briefcase) was rolled out yet again for Yesterday's Spending Review and Autumn Statement, both of which were set out to Parliament. Here, NJL provides an update on key points which affect planning, construction and other associated industries.
In a session replete with drama and haranguing over U-turns, there were several highlights of particular importance to us in the planning and development world. So in this guide, we'll summarise some of the key points and offer our thoughts on what the government's plans might mean for us in these sectors in the coming years.
Setting out a 'bold and radical' plan to transform the nation's courts, Osborne announced the closure of under-used courts and sale of Victorian-era prisons that aren't suitable for rehabilitating prisoners. Lamenting the scale of the on-going housing crisis as one of the 'great social failures of our age,' the Chancellor said these prime locations would then be used to create further space for housing in the inner-cities of Britain.
"Spending Reviews like this come down to choices about what your priorities are. And I am clear: in this Spending Review, we choose to build," he said.
NJL welcome this plan and think the sales will free-up much-needed development space in city areas that have suffered from housing shortages.
But Osborne was far from done on the housing front, going on to announce several high-profile initiatives, including:
- Doubling the housing budget to more than £2 billion each year
- Delivering 400,000 affordable new homes by 2020
- Providing first-time buyers with a 30% discount on new Starter Homes and the government’s intension to build 200,000 Starter Homes.
- Extending the Right to Buy policy in a pilot of five housing associations, as well as a stand-alone London-centric scheme where from 2016, the government will lend up to 40% of the price of a home in London (up to the value of £600,000) to first time buyers.
- The extension of loans for small builders.
- Regeneration of run-down urban estates.
- £300 million in investment for the Ebbsfleet garden city.
- New stamp duty rates (3% above the current SDLT rates) on those buying buy-to-let properties and second homes as of April next year and the government using that money to aid others getting on the housing ladder for the first time.
- Releasing government-owned assets to free-up much needed space.
NJL Managing Director, Nick Lee, agrees that housing is an “absolute priority and any measures to tackle the UK's alarming deficit in homes must be welcomed”. He continued to say “any funding increases need to be delivered quickly” in order to facilitate the desired impact.
Starter homes and shared ownership initiatives also have the potential to alleviate the housing crisis, but we feel the release of government-owned assets needs to be initiated much more quickly if the UK is to tackle the growing gap in demand for homes.
Also with a view to accelerating housing production, Osborne unveiled further reforms to the planning system, including the aforementioned release of public land and re-designating unused commercial plots for starter homes.
While we await further details of these reforms, changes to the planning system will only kick in if all authorities are committed to supporting housing land release quickly. However, councils also need the resources to carry out these processes properly, as well as filling planning applications on a day-to-day basis. In our view, this is unlikely to occur in the immediate future.
Another key headline which aids existing and proposed housing is the government’s pledge to spend £2.3 billion on 1,500 flood defences which will in turn protect 300,000 homes.
The Chancellor also unveiled a 50% rise in capital funding for transport projects, as well as the long-awaited electrification of the Trans-Pennine, Midland Mainline and sections of the Great Western Railway.
Investment in infrastructure and the rise in captial funding are critical, as is the specific investment in Transport for the North, something I know Nick strongly welcomes.
The headline policy on the local government front was the transformation of business rates – abolishing uniform rates and allowing local governments to keep all revenues they generate.
NJL view this as very welcome news, granting local authorities the ability to pump these funds into much-needed infrastructure improvements. Local government will also be able to keep 100% of the receipts on property asset sales, which will be a double-boon for stimulating property markets across the country.
However, we feel a closer relationship between councils and the development community is needed to make the most of these changes.
If you've got any thoughts on the Autumn Statement and Spending Review you'd like to share, or want to quiz us about anything we've touched on above – be sure to leave us a comment or get in touch on Twitter.
And if you're wondering how forthcoming policy changes might affect your development plans, don't hesitate to get in touch with our expert team today.
Images sourced from:
Richard G via flickr
Doug88888 via flickr