Here is a summary of the key points that the chancellor announced in his Autumn Budget 2018 that are particularly relevant for those in the Housebuilding Industry…
- The Help to Buy scheme will be extended to run until March 2023
The Help to Buy scheme, designed to increase the number of first-time buyers on the housing ladder through government loans, has had an enormous impact on the housing market. It has been a great selling point for developers to advertise when exiting their project.
This extension recognises that Help to Buy has been driving supply and profits. It now means housebuilders can plan ahead confident in the knowledge that this support will continue.
- Stamp duty abolished for first-time buyers of shared ownership properties
Last year stamp duty on a home worth up to £300,000 was abolished for first-time buyers. This has helped boost the number of first-time buyers to an 11-year high. Not only are they the fastest growing sector but they are chain free and a fantastic choice for SME housebuilders to target.
This extended benefit will apply to all shared ownership homes worth up to £500,000 and backdated to anyone who has purchased one since the previous Autumn’s Budget.
- Capital gains tax
From April 2020 the government will reform lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant.
The final period exemption will also be reduced from 18 months to 9 months. The government will consult on these changes.
- Consultation on SDLT charge for non-residents
The government will publish a consultation in January 2019 on a stamp duty surcharge of 1% for non-residents buying residential property in England and Northern Ireland.
- Housing funding
- £291 million from the Housing Infrastructure Fund, funded by the NPIF, to unlock 18,000 new homes in East London through improvements to the Docklands Light Railway.
- The British Business Bank will deliver a new scheme providing guarantees to support up to £1 billion of lending to SME housebuilders.
- £653 million to 2021-22 will be provided for strategic partnerships with nine housing associations to deliver over 13,000 homes.
- £75 million from the Home Building Fund for St Modwen plc, to fund infrastructure to build over 13,000 new homes.
- A new five-year strategic business plan for Homes England, to be published on 30 October 2018.
- The Housing Infrastructure Fund, funded by the NPIF, will increase by £500 million to a total £5.5 billion, resulting in up to 650,000 new homes.
- A £10 million government fund will be available to support ambitious housing deals with authorities in areas of high housing demand to deliver above their Local Housing Need.
- £8.5 million of resource support so that up to 500 parishes can allow land for homes sold at a discount.
- Land banking
An independent review found no evidence that major housebuilders are speculatively land banking and creating slow build out rates as a result.
The government confirms that Help to Buy Equity Loan funding will not be made contingent on large sites with existing outline permission being developed in conformity with any new planning policy on differentiation. The government will honour any funding commitments made to sites with existing outline planning permission, regardless of any new planning policy on differentiation.
The Budget announces that the government has launched a consultation on new permitted development rights to allow upward extensions above commercial premises and residential properties, including blocks of flats, and to allow commercial buildings to be demolished and replaced with homes.