Chancellor Rishi Sunak today used his 2020 Budget to announce a series of spending initiatives, including a £12 billion five-year extension to the Affordable Homes Programme, and a £1 billion new Building Safety Fund aimed at removing dangerous cladding from high-rise buildings post-Grenfell. These decisions are among a number of much-welcome initiatives for the social housing sector. 

Read our summary of the key items from today’s Budget and what this means for housing providers below. 

Affordable Homes Programme extended

The key announcement for the housing sector was the Chancellor's announcement that the Government will extend the Affordable Homes Programme, with a new multi-year settlement of £12 billion. This is a £3 billion increase on the current five-year Affordable Homes Programme, that was  due to end in 2021 (currently worth £9 billion). The extension will help more people into home ownership and help those most at risk of homelessness as well as increasing certainty in the market, to enable the sector to build much-needed homes.

Housing Infrastructure Fund

In what the government are calling a “record” infrastructure spend, the Chancellor has announced £1.1 billion of allocations from the Housing Infrastructure Fund for infrastructure to allow up to 69,620 new homes in high demand areas across the country. In particular, it has been declared that £5 billion will be spent on ensuring high-speed broadband is accessible in the areas in the country hardest to reach, as well as £510 million to be spent on the shared rural mobile phone network so that in the next five years 4G coverage will reach 95% of the country. A £2.5 billion pothole fund has also been confirmed, as well as £27 billion to be spent on more than 4000 miles of roads. The improved infrastructure and greater connectivity resulting from these measures will help increase the demand for housing in those parts of the country, particularly rural areas, where previously there may have been substandard broadband, poor local transport and a lack of 4G coverage. However, it remains to be seen whether these measures will be enough to encourage the building of new homes in these areas at the rate required, and we watch with interest for the planning reforms expected tomorrow.

Building Safety Fund 

Sunak announce that a new fund, the Building Safety Fund, would be created—providing £1 billion to remove forms of cladding deemed unsafe or combustible, which will be a huge relief for landlords. However, questions remain as to the whether a sufficient number of specialist contractors exist to undertake the works to remediate unsafe buildings, and what will happen to those buildings less than 18 metres tall, which will not qualify for the Fund. Moreover, at this stage it is unclear whether the most dangerous buildings would be prioritised for remedial works - something the sector has been push for for some time. 

Property tax 

Turning to residential property, Sunak announced an additional rate of Stamp Duty Land Tax (SDLT) for non-UK residents at 2% from April 2021, with the intention of using some of the funds received from the SDLT income towards a £650 million programme aimed at ending rough sleeping by providing 6,000 new homes. Perhaps surprisingly, the Chancellor did not hint at further reform to SDLT, despite previous murmurs that Boris Johnson had been keen on increasing the SDLT threshold to £500,000 and dropping the top rate to 7%.

Flood defences

It has also been confirmed by the Chancellor that the government are doubling investment in flood defences over the next six years to £5.2 billion, including £200 million specifically for communities that suffer from repeated flooding, which the government says will help to protect over 300,000 properties currently without adequate defences. This may help to ease and quicken the process of obtaining planning permission in areas currently at a high risk of flooding but the maintenance of existing flood barriers, which was not mentioned specifically by the chancellor, will also be vital in achieving this.

Public Works Loan Board rates cut

The Chancellor has cut interest rates for local authorities by one percentage point, where loans are for social housing. This effectively reverses the unexpected increase in rates that applied from October 2019.

How Capsticks can help

Capsticks provides truly national full-service support to over 200 registered providers (RPs) across the UK. If you have any queries around what's discussed in this article—or the Budget itself—and the impact on your organisation, please speak to Susie Rogers, Spencer Vella Sultana, James Aronsson or Alexander Gray to find out more about how Capsticks can help.