Social Housing Speed Read – The Budget

Given that the publication of the White Paper (“fixing our broken housing market”) was a little over a month ago and its planning measures are still being absorbed, this is perhaps not surprising.

It was expected, and would have been useful to see, some endorsement and have further information on the proposals outlined in the White Paper. Those who listened to the Budget will know that Chancellor Phillip Hammond barely made reference to housing.

Labour MP John Healey considered this to be a vote of no confidence from the Chancellor in the White Paper on the basis that there is no follow-up in the Budget.

However, can this be considered in a positive light? Much of the commentary since the budget relates to the U-Turn following the scrapping of plans to increase National Insurance rates for self-employed workers. So far there is no change for the housing sector – which in itself is quite a change…

Calls for adjustment to stamp duty charges to encourage movement in the property market and assist first time buyers were also ignored by the Chancellor. Tax thresholds will stay at the same levels introduced in 2014.

There was also no consideration given to Local Housing Allowance (LHA) with calls in the sector for LHA to be recalculated to reflect local rents more realistically. The cap on benefit payments for social tenants from 2019 will significantly impact housing association income.

Announcements

Some announcements that may be of interest to the social housing sector are:

• An extra £2 billion for councils to meet social care costs over the next three years. This is surely a welcome change albeit it not a long term solution. It is also likely to impact housing organisations. The focus of this £2 billion funding will be on ending delays to patients leaving hospital
• £200 million of housing association borrowing has been brought forward by the government
• The publication of the Midlands Engine strategy which the government refers to as “a demonstration of the Government’s commitment to making the Midlands a powerful engine for economic growth”
• London’s City Hall will look at new approaches to funding following the agreement of a new devolution agreement with Sadiq Khan, the Mayor of London. A taskforce will be created to look at options for major infrastructure developments in London.

The Government admitted in the Housing White Paper that the property market is “broken”. It is therefore not surprising that industry reaction on the whole is that of disappointment and missed opportunities – with many considering this a budget that ignored the housing crisis.

Phillip Hammond has advised that this will be the last Spring Budget and that going forward the main Budget will be in the Autumn Statement – maybe then we will see the social housing position and “broken” market being addressed.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.