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Howard Chapman, Buildingtalk Editor.
Buildingtalk reviews the 2017 Budget and the measures that will directly impact the construction industry. We also have some construction industry response to the Budget. You are welcome to add your views below.
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As usual, the best short reviews of the Budget were provided by the BBC and The Guardian
Tom Farmer, The Brick Development Association
The Brick Development Association, representing brick manufacturers in the UK, welcomed the Chancellor’s target for new homes, stating with confidence that the brick industry is ready. The number of new homes delivered in the last financial year – at 217,350 – is 12% up on the previous year, with brick deliveries also rising at 12% over the same period, suggesting that supply and demand are in balance.
Brian Berry, Chief Executive, Federation of Master Builders (FMB)
“The Chancellor appears to be putting his money where his mouth is with the announcement of £44 billion of capital funding, loans and guarantees. In particular, a further £1.5 billion for the Home Building Fund to be targeted specifically at SME housebuilders can play a significant role in channelling crucial funding to this sector. A £630 million fund to prepare small sites for development and proposals to require councils to deliver more new housing supply from faster-to-build smaller sites will provide opportunities to boost small scale development. A second major challenge to getting new homes built is the skills crisis. We are therefore pleased to hear the Chancellor has today committed extra resourcing to training for construction skills. With Brexit round the corner the next few years will bring unprecedented challenges to the construction sector. The Government will need to make sure that the sector continues to have access to skilled EU workers.”
Richard Beresford, chief executive, National Federation of Builders (NFB)
“The NFB welcomes action on allowing local authorities to borrow to build, tackling land banking and empty properties back into use. However, policies such as the abolition of stamp duty for first-time buyers on properties worth up to £300,000 could still fuel demand without doing much to stimulate supply. The budget shows that the Government has listened to the construction industry when it comes to solving the housing crisis. Although there is much more to do, we look forward to work alongside the Government in enabling construction SMEs to solve Britain’s housing crisis.”
Ian Fletcher, Director of Real Estate Policy, British Property Federation
“The housing crisis didn’t happen overnight and won’t be solved in a day. We welcome the commitment from the Chancellor today to long-term solutions, and actions that seek to take that commitment forward. What excites us is the commitment to infrastructure, the opportunities that places like Oxford-MK-Cambridge will provide, and the more flexible use of government support through measures like guarantees, to support housing delivery.
Eddie Tuttle, Associate Director, Chartered Institute of Building (CIOB)
“With productivity growth, business investment and GDP growth all downgraded, a clear solution is to look to construction as an enabler that can allow all of these to improve. We need to be looking to the wider benefits of good public sector investment that go far beyond just economic value, including investment that can provide social, environmental and other hidden value”.
Sian Berry AM, Chair of the London Assembly Housing Committee
“The London Assembly Housing Committee welcomes the Chancellor’s decision to lift the borrowing cap on local authorities. The committee has called for this change for years, to stimulate investment in council housing”.
Chris Claydon, Chief Executive, Engineering Construction Industry Training Board (ECITB)
“We welcome the extension of the National Productivity Investment Fund, which will deliver a much needed boost to infrastructure. Removing the tax disincentive to transfer North Sea oil and gas fields will also be welcomed by the sector, plus the additional investment earmarked for the delivery of the T-levels and further details on the new National Retraining Scheme”.
Claire Fallows, Partner at Charles Russell Speechlys
“Despite Government claims that it is “determined the fix the broken housing market, the Budget has confirmed the commitment to maintain existing protections for the Green Belt. Given that a number of authorities are in the process of releasing sites from Green Belt allocation through local plan reviews, any claims that the Green Belt still remains sacrosanct are disingenuous. In light of that, a wholesale strategic review of the purpose and function of the Green Belt is in the interests of the country and is long overdue.”
Duncan Field, head of planning, Norton Rose Fulbright
“The Budget promises more of the same rather than radical reform in its approach to housing delivery and the planning system. On land banking and the rate of housing delivery, the Government has sensibly commissioned a review which will be led by Oliver Letwin; it is important that Government understands the complexity of the housing delivery process”.
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Ed Thurman, Ambassador for London at Lloyds Banking Group:
“The recent Budget made clear the Government’s ambition to deliver more skills based training within the construction industry. We are delighted that the Government will be investing £204 million into innovation and skills in the construction sector, including training a workforce to build new homes. In order for the Government to achieve the target of building 300,000 homes per year, we need to help narrow the skills gap in the construction sector. This is why the Lloyds Bank Construction Skills Fund was established as part of our commitment to helping Britain prosper, where, along with Newham Council and Lendlease, we are addressing the challenges of housing and employability by delivering more construction skills training in Newham.”
Andrew Carpenter, Chief Executive of the Structural Timber Association:
The Structural Timber Association welcomes the housing initiatives outlined in Philip Hammond’s Autumn Budget. However, the construction industry cannot deliver the target of 300,000 new homes a year by 2025 using only traditional building methods.
In his opening address Philip Hammond said that the world is ‘on the brink of a technological revolution’ and he plans to invest to keep Britain at the forefront. It is encouraging that he believes this equally applies to factory floors and business parks, because the Structural Timber Association is confident that this is where many of the required new homes can be delivered using technically advanced, offsite manufactured structural timber systems.
Our latest Annual Survey of UK Structural Timber Markets analyses timber trends together withthe available capacity within the timber frame sector. This report has been developed to illustrate to Governments that our sector can deliver up to 50% of the target for new homes by 2021. However, to achieve this, our members need a firm commitment from Government before they invest.
I was interviewed yesterday by BBC South West for their budget review, which is recognition that offsite manufactured timber systems are viewed as part of the solution to the housing crisis and that our Association is seen as leading the campaign for the adoption of more technically advanced methods of construction.
The alignment of market need and political will is clear and compelling, signalling a real opportunity for a step change. It is now time to get down to the detail. We already have the systems, solutions and capacity to meet the demand. We have the expertise, the resources, the skills, the raw materials and the environmental credentials to take to market and demonstrate how we can be an integral part of this progression to provide a solution to the UK’s housing issues.
Stephen Stone, Chief Executive Officer, Crest Nicholson
“Crest Nicholson welcomes the Chancellor’s recent commitment to provide an additional £10bn to support first time buyers via the Government’s successful Help to Buy Scheme.
This positive investment, along with the removal of Stamp Duty for first time buyers on properties up to £300,000 and the exemption on the first £300,000 of a £500,000 property in high-value areas, is a necessary step to help tackle some of the challenges facing the UK housing market.
The Government’s support for the housing sector is encouraging news and the Chancellor’s complete funding pledge of £44bn to the industry, will see more jobs created to help tackle the chronic skills gap in the industry. House builders must now build on this momentum to create more exciting career opportunities and attract the best young talent into an industry which has so much to offer.
However, if the Government’s target of 300,000 new homes by 2020 is to be met, house builders need to start increasing output immediately, which can only be done by speeding up the time it takes to achieve implementable planning consents. When you consider that for every £1 spent on building work, it is estimated that almost £3 of wider economic output is generated, the Government must act now to streamline the UK’s planning process to unlock this revenue and further support the UK economy.
The UK is a nation of home-owners by tradition and the difficulties faced by young people getting on the property ladder threatens the long-term prosperity of the country. The Chancellor’s Budget is a positive step forward for the UK housing industry and we call on the Government to continue to work closely with the housing industry to make the dream of owning a house a reality for more and more people.”
Steve Mansour, CEO of construction insurance specialists, CRL:
“We are extremely encouraged by the latest plans set out by Philip Hammond. Large house builders have held the majority of the power for too long and it is great to see investment to support small to medium–sized firms that fight daily to overcome bureaucracy. The UK hasn’t built more than 250,000 homes in one year in decades. At that time, SME builders accounted for three-fifths of all new homes – now it is less than a fifth. With a lack of adequate land, small-medium builders – vital to spur competition – are nearly always pushed out by the big boys. The construction industry has been lacking confidence, and we hope that this is the first of many steps towards solving the housing crisis and ultimately, a better Britain.”