todayOctober 27, 2021
The construction industry is still poring over the finer details of today’s budget from Chancellor Rishi Sunak and what the wider implications are. In terms of the headline points, however, many within the sector have been quick to provide their first impressions of his announcement, including the unveiling of a £1.8bn fund to support the delivery of housing on brownfield sites across the UK.
Jordan Rosenhaus, CEO at modular housing firm, TopHat:
“The Government’s new £1.8bn brownfield fund proves that sweeping planning reforms are anything but dead under Gove. Today’s announcement proves that ministers still see the benefit of redeveloping vacant or derelict sites to bring new investment into areas and increase housing delivery.
“The Treasury reckons that 160,000 homes could be built on brownfield land across the UK. However, if anything, these estimations are too conservative.
“Either way the Government is rightly providing an opportunity for developers to transform neglected urban spaces. What’s more, the transport infrastructure often required for new housing developments already exists on most brownfield sites, bringing down capital costs and accelerating construction programmes.
“However, in order to reduce disruptions to local communities, policymakers should be pushing for a requirement that would mean more of the homes being built on brownfield sites are manufactured off site. With 90% of the build stage taking place in a factory, companies such as ourselves can drastically reduce vehicular movements to site and consequential emissions.”
Jitendra Khagram, director of KSEYE:
“Unlike many industries, the property sector has performed extremely well during the pandemic, with the stamp duty holiday doing much to galvanise the market over the past 18 months. As such, it is understandable that the Chancellor chose not to interfere too heavily in the property market.”There were positives to be taken nonetheless, in what was an unashamedly optimistic speech. Housebuilding and infrastructure investments were inevitably a key feature, while the reforms to business rates will support the commercial real estate market by encouraging green investments in offices, and the business rates relief for the hospitality, retail and leisure sectors will help high street businesses and their landlords.”More generally, news that the economy is forecast to grow by 6.5%, almost double the forecast rate, should buoy confidence among both domestic and international property buyers, underlining that the UK has fared better-than-expected during the Covid crisis. I think that by not tinkering with property taxation or CGT, the Chancellor has taken the right path, and the property sector will likely welcome this decision.”
Sam Le Pard, co-founder of LEXI Finance:
“Solving both the housing and climate crises requires the government and lenders to create an environment where it is sustainable, both financially and environmentally, for SME developers to deliver greener homes on brownfield land. A lack of competitive options in green finance is restricting SMEs from playing a key role in tackling the chronic undersupply of homes in a sustainable manner.”
“We support the continued priority shown to brownfield land for new housing, but in solving one problem, it’s important that ministers don’t add to another.
“The Office for Budget Responsibility estimates that the total cost of making the UK’s 29m homes net-zero by 2050 currently stands at £250bn. However, this figure increases with every day that we build homes that will require retrofitting when new building regulations come into play by 2026 as part of the Future Homes Standard.
“Therefore, ministers must mandate that homes being delivered as part of this fund are some of the country’s most energy-efficient in order to avoid future retrofit costs. In practice, that means new homes should achieve nothing less than a ‘B’ Energy Performance Certificate rating. Innovators – such as Etopia Group – already have the capabilities, resources and experience to deliver zero-carbon homes today, as is evidenced via our partnership with Homes England.
“It is often possible to deliver homes on vacant, brownfield land, and often such land sits close-by existing housing, permitting synergies with local amenity and infrastructure. Brownfield land remediation does entail some additional costs, and the success of the Brownfield Land Release Fund shows how support for those costs can help to unblock housing supply. Today’s announcement of further funding is welcome, but it is important that it is spread geographically in support of green growth and sustainable housing delivery in areas of need.”
“Todays’ Budget, for us operating in property and Construction, felt a little like a hotly anticipated meal where Chef had leaked much of his surprise menu in advance & when it came to it, the showstopper was something of a soggy soufflé. For instance last weeks’ news on the Governments heat and buildings strategy, gave the Chancellor a chance to announce serious funding for a long term national retrofit programme to improve the energy efficiency of the UK’s 30m buildings but we heard nothing and news of the much delayed revised integrated rail plan was also absent . There was £1.5bn in new money to improve transport links which is welcomed plus £1.8bn for brownfield residential building and £3.8bn to build new prisons. Investment relief on Business rates for Green improvements is also welcomed as were new discounts on rates for retail and hospitality. But when achieving Carbon zero is seen as a bigger issue by most people than Covid, the lack of investment in this area was a missed opportunity.”
“The Chancellor confirmed again that levelling up is at the core of the Government’s policy agenda and gave some indication of how public spending will be used to support critical building blocks such as infrastructure and housing supply.
“The £1.8bn allocated to brownfield development is a positive commitment to regeneration and will unlock underutilised sites across the country and create new opportunities for SME property investors and developers .
“We will need to see further details in the promised levelling up white paper however to understand how the millions of pounds of investment our sector represents can partner effectively alongside national and local government to deliver the built environment which is critical to levelling up across the country.”
Mary-Anne Bowring, group managing director at leading property management consultancy, Ringley Group:
“A blanket tax on developers is fairer than leaving leaseholders to shoulder the burden but it is still a blunt instrument to use to fix the cladding crisis.
“Fundamentally, accountability should fall squarely on those who overlooked the potential hazards of unsafe cladding in the first place.
“That those responsible should cover the costs of what is ultimately a multi-billion pound myriad of mistakes is an obvious resolution to anyone, and it’s frankly bizarre that we’re still debating this when recent fire safety legislation provided the perfect opportunity to protect vulnerable leaseholders.
“Instead, those most affected are more unclear than ever as to their obligations, or who to turn to, and are increasingly sidelined in discussions about fire and building safety. Replacing unfit cladding systems continues to eat away at the Building Safety Fund at an alarming rate of £30m a month, and these allocations only cover high-risk buildings. Empowering leaseholders and occupiers with a voice should be at the forefront of future Government action.”
Professor Adam Boddison, chief executive at Association for Project Management (APM):
“Building homes for the future is one of the most important projects any government can undertake. As the chartered body for the project profession, we hope this investment will be used to help upskill those tasked with planning and delivering projects. Good project outcomes require the right conditions for success. Any announcement of new initiatives must be matched by the capability and commitment to deliver them well.”
Paresh Raja, CEO of Market Financial Solutions:
“Today’s Budget was full of the usual optimism and rhetoric, but light on substance for the property market. But I dare say the property sector will not mind. In reality, no news is good news, particularly as there were many rumours that a CGT hike was in the offing. ”The property market bucked the trend and thrived during the pandemic, so limited state-interference at this time makes sense, allowing the market time to reset after the stamp duty holiday. Plus, the Government needs all of the tax receipts it can get to fuel its ‘levelling-up’ agenda, so reforms to stamp duty or inheritance tax, which will have impacted property owners, were never likely. ”For many homeowners and property investors, all eyes should now turn to next week’s Bank of England meeting. Inflation has been on the rise throughout 2021, and the BoE will be under pressure to increase interest rates to combat this trend – doing so will impact on the cost of borrowing for property buyers, so this meeting could in fact hold greater relevance than today’s speech.”
Philip Woolner, Managing Partner at Cheffins:
“The Chancellor’s pledge today of almost £2bn-worth of funding for development of brownfield sites is a savvy move from the government and is welcomed in its mission to help build out neglected potential sites across the country. With the ability to ‘unlock one million new homes,’ the funding will work in a two pronged approach in both helping to create additional housing which is so crucially needed, whilst also protecting the greenbelt. As brownfield sites are often in locations where demand for housing is lower or economic growth is weaker in comparison to other parts of the country, it can often be difficult for developers to justify building these out, particularly when assessed against easy-to-develop greenfield sites in high demand locations. For developers, brownfield sites which frequently come with additional complications, higher costs and potential contamination issues can be a rather unattractive proposition and hopefully this injection of cash from the government ought to encourage developers to take on these sites which have been calling out for rejuvenation or to get cracking with building out the sites which have already been banked by many of the national housebuilders. The results of building out brownfield can be spectacular, for example at the Queen Elizabeth Olympic Park or the Gasholders site at King’s Cross, and they can bring huge economic and social benefits to a given area. Finally, the government has seen the potential for many of these sites across the UK and has been willing to help ensure that it is still within housebuilders’ interests to make use of these types of areas, instead of setting vote-getting housebuilding targets to be achieved at random, spoiling much of the countryside in the process.
“However, it also must be remembered that whilst it would be great to have these sites cleaned up with rows of shiny new properties, there will still need to be a significant level of greenbelt development in the coming months if the government is going to meet its housing targets, particularly in London and the congested south east. And the important element here is the delivery of green, affordable housing, which will allow the government to work towards its net zero carbon goals, whilst also addressing the housing shortage. Affordability continues to be a major issue for vast swathes of the population and whilst the government’s aim to build an additional 300,000 homes per year for the next five years is all very laudable, these need to have a large proportion offered at affordable price points in order to help the millions still struggling to get onto the property ladder. Thankfully the Chancellor’s announcement of a dedicated £11.5bn towards solely affordable housing ought to help this, however the proof will be in the pudding as to whether 180,000 new affordable homes is enough to really make an impact on this perennial problem which successive governments have repeatedly tried to tackle.
“These are muddy waters ahead and the government will need to review both its housing targets and its changes to the planning system regularly in order to navigate them.”
Ben Hancock, managing director at Oscar Acoustics:
“The rise in corporation tax is yet another blow to SMEs still recovering from the difficulties of the past 18 months. Further cuts to business rates would have sent a clear message that the Government is firmly behind companies looking to make a strong recovery and contribute to the country’s struggling economy.”
Jon Hart, infrastructure partner at Pinsent Masons:
“Major rail projects that form the backbone of the government’s levelling up agenda including HS2, Northern Powerhouse Rail and East West Rail are at risk of being significantly delayed, over budget or even drastically scaled back as exemplified by rumours on the removal of the eastern leg of HS2 Phase 2. The cost of steel is now 75% higher than it was 12 months ago and with Network Rail purchasing 97% of the steel produced by British Steel, these transport projects that have been designed to close the gap on regional disparities across the UK, are going to become increasingly challenging. If the government is serious about progressing its levelling up and build back better ambitions, it is going to need to remain clear-sighted in relation to the cost-benefit analyses of these projects and prioritise its ‘Project Speed’ initiative intended to shorten the time required for these important rail upgrades to be consented and approved.”
Peter Hawthorne, chief executive of LCR, the government’s regeneration and placemaking expert:
“When ironing out the practicalities of the £1.8bn brownfield fund, the opportunities available on transport-linked land should not be overlooked. There is space for tens of thousands of homes on brownfield sites surrounding the UK’s railway network.
“The £7bn in funding for regional transport transformation also announced by the Chancellor should help on this front, freeing up more of the brownfield land surrounding transport hubs for development to create homes, regenerate communities and drive levelling up.
“However, the availability of capital isn’t the only factor holding back more brownfield development. Many sites with significant potential, particularly in town centres, have complex, piecemeal ownership structures and require close private and public sector collaboration to unlock.
“The £65m to help digitise the planning system could make it easier for planners and local authorities to identify and bring forward the opportunities that the brownfield fund is committed to supporting.”
Jamie Johnson, CEO of FJP Investment:
“While today’s Budget may seem light on the property front, if anything this is a testament to the market’s resilience and strong performance throughout the pandemic. As the property market resets after the hectic stamp duty holiday period, limited state interference is likely to be well received by the industry.
“Taking in the bigger picture, there are definitely some positives to be taken from today’s speech. After all, given other areas of the economy are in need of more urgent Government support, we are fully behind the levelling up agenda and the Chancellor’s £1.7 bn funding commitment to address regional disparity. Targeted action is needed to address the UK’s longstanding regional inequalities, which have only deepened in the face of the pandemic, and a greater investment in infrastructure and skills will be key to addressing the longstanding ‘North-South’ divide, accelerate growth and unlock the investment potential of key cities and urban areas across the UK. Property markets across the North of England and Midlands, for example, will benefit from the money being ploughed into regional economies, job markets and productivity.”
Hugh Gibbs, co-founder of SearchLand:
“This country doesn’t have enough homes. The UK’s affordability crisis has been building for decades and there is an urgent need to deliver more high-quality affordable housing, but the pace of construction is failing to meet demand. As such, the Chancellor’s funding pledge to encourage brownfield residential redevelopment across over 100 areas is a positive step in the right direction, but there needs to be a concerted effort from the government to ensure the homes are fit for purpose and affordable for those in need.
“Construction has a vital role to play in the post-pandemic recovery of our communities and can significantly contribute to the government’s levelling up agenda. We have seen how successive governments have attempted to solve the ongoing crisis by projecting ambitious housing targets, but until the shortfalls of the planning process are addressed, the potential of the UK’s viable land will continue to be wasted to the detriment of individuals’ urgent housing needs.
“While we welcome the Chancellor’s commitment to increase housebuilding, what’s needed now, more than ever, is a seismic shift in our outdated and ineffective planning system, which continues to be a threat to housebuilders’ ability to deliver new homes. A £65m funding pledge to help digitise the planning system might seem like a positive step, but given the scale and complexity of the task, as well as this Government’s track record with digitisation projects, is enough emphasis being placed on this issue given its immense importance?”
Donald Morrison, SVP People & Places Solutions Europe and Digital Strategies at Jacobs:
“Today’s spending commitment to improve regional transport networks and roads is a significant opportunity to create new sustainable infrastructure. Globally, cities account for 60% of global carbon emissions and 78% of energy use, but the UK can now set an example of the alternative. If we use data to plan how this funding is used, we will design transport systems that encourage individuals to take public transport, use electric vehicles, walk and cycle more. Being ambitious in how we use this funding, we can create healthier places to live as well as contributing to the global reduction in emissions.”
Stephen Beechey, Group Public Sector Director, Wates Group:
“We welcome the Chancellor’s budget and, as a business with a significant national footprint, we are particularly buoyed by the Government’s continued focus on levelling up, including a 20% increase in funding for new affordable homes and the 100 local infrastructure projects that will benefit from the levelling up fund.
“The construction industry stands ready to start creating the thousands of new homes the country needs, updating and building hundreds of modern schools and colleges, and the infrastructure required to address some of the longstanding inequalities between north and south. The increase in capital spending for healthcare to £11.2bn, including to upgrade the existing healthcare estate, will also be crucial in supporting the NHS to achieve its net zero ambitions.
“As an employer focused on the skills needed for the future, we were pleased to see a commitment to a ‘skills revolution’. The new funding for T-Levels and adult education will help equip the next generation of construction workers with the skills they need to succeed in a post-pandemic net zero economy.”
Richard Waterhouse, spokesperson for NBS:
“Whilst we welcome the chancellor’s investment in brownfield sites, which will no doubt help the sector meet Government quotas to tackle the housing crisis, stronger direction is needed around hard-deadlines and targets for how the construction industry plans to meet Net Zero target emissions.
“Its plans for a ‘skills revolution’ is also a step in the right direction and a significant investment in digital education will be perfectly timed to tackle the skills shortage the sector urgently needs to address. However, the chancellor should also look to address more immediate crises, such as a solution to materials shortages which isn’t currently hindering significant growth for the sector.”
Construction Innovation Hub Programme Director, Keith Waller:
“The Hub has a vital role to play in delivering the ambitions of the Budget. From the use of its Value Toolkit, to our Platform-based approach to our focus on innovation and transforming practice throughout construction and the built environment our work is focused on building back better.
“Now we know what the government’s priorities are, it is now important we focus on how these are delivered. The Hub will continue to support government in these aims to deliver true value and tackle the challenges of tomorrow, today.
“Improved OBR forecasts for growth and levels of unemployment have given the Chancellor more headroom to invest and innovate. As such, it is disappointing to see the date the government will meet its own target for R&D spending slip by 2 years.
“However, with the announcements for increased departmental spending, we look forward to the detailed plans emerging demonstrating how this investment will continue to drive the sector’s transformation to a more sustainable, innovative and productive future in line with the ambition of Build Back Better.”
Jonathan Hale, Head of Government Affairs at RICS:
“While the next phase of business rates relief is welcome, this seemingly endless tinkering underlines the need for a longer-term reform to support high streets and help restore them into the thriving commercial centres that communities want to be proud of. The devil will be in the detail and our surveyors will need clear, unambiguous guidance from government to help businesses to make the most of this new support.
“Chancellor Sunak didn’t mention the need to retrofit, rather than demolish, existing buildings – a key to unlocking Net Zero carbon emissions for construction in Britain – but the £3.9bn pledged to decarbonise homes and offices, which included support for low income homeowners to transition their heating, is a good start.
“The £5bn for cladding replacement – which we already knew was coming since February – will give more leaseholders greater peace of mind that their homes will be made safe but it’s still well short of the £15bn needed that is estimated to fix every building, but the additional funding to deliver a hundred and eighty thousand much needed affordable homes is welcome.”
Graham Harle, CEO of Gleeds Worldwide:
“Todays’ Budget, for us operating in property and Construction, felt a little like a hotly anticipated meal where Chef had leaked much of his surprise menu in advance & when it came to it, the showstopper was something of a soggy soufflé. For instance last weeks’ news on the Governments heat and buildings strategy, gave the Chancellor a chance to announce serious funding for a long term national retrofit programme to improve the energy efficiency of the UK’s 30 million buildings but we heard nothing and news of the much delayed revised integrated rail plan was also absent . There was £1.5bn in new money to improve transport links which is welcomed plus £1.8 bn for brownfield residential building and £3.8bn to build new prisons. Investment relief on Business rates for Green improvements is also welcomed as were new discounts on rates for retail and hospitality. But when achieving Carbon zero is seen as a bigger issue by most people than Covid, the lack of investment in this area was a missed opportunity.”
Managing Director of Barrows and Forrester, James Forrester:
“Time and time again we’ve seen the government pledge to fix the housing market using recycled rhetoric and funding from previously announced initiatives. Today was no different and reading between the lines, we can expect to see them continue to over promise and under deliver in their attempts to address the housing crisis.
While Boris Johnson might not be a fan of recycling, his chancellor certainly is and so the 180,000 new homes pledged today is certainly no step forward.
The only bone thrown to a nation of ravenous homebuyers starved of housing stock has been a scrap of properties built on brownfield sites.
According to the MHCLG, there are some 36,000 hectares of brownfield land across England alone, enough to deliver over 1.3m new homes. So even if the government does make good on its promise, it’s just a fraction of what they could, and should, be building.”
Director of Benham and Reeves, Marc von Grundherr:
“Disappointing to see such a brief mention for the UK property market in today’s Budget.
The Chancellor has chosen to give the sector a bit of the cold shoulder with just a handful of headline figures, clearly believing his job is done having fuelled house prices to record highs via the recent stamp duty holiday.
We need more homes to satisfy our ever-growing appetite for homeownership and an insignificant level of brownfield development is more of a slap in the face than it is an outstretched hand
As for the £11.5bn pledged for 180,000 affordable homes, it’s a start, but hardly news given it was announced by Robert Jenrick a year ago.
It simply isn’t enough and with the government consistently failing to meet their previous housebuilding targets, it will be a miracle if we see a brick laid on brownfield land or a meaningful level of affordable homes delivered in our lifetime.”
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