Anticipated Insights for the Housing Market in 2024's Spring Budget: Expert Forecasts
In the lead-up to the Spring Budget 2024, scheduled for 6 March, housing experts and industry leaders are speculating about the direction the government will take in addressing the nation's housing crisis. This year's budget is expected to be a crucial battleground point in the upcoming election, as affordability and the cost-of-living continue to be major concerns for the electorate.
According to recent data, England's housing stock expanded in 2022 with the addition of 212,570 new builds, 22,160 properties changing from non-domestic to residential, and 4,500 houses converted to flats. However, the government failed to meet its goal of delivering 300,000 new homes in 2022-23.
Chancellor Jeremy Hunt, who is set to deliver the Spring Budget following the Autumn Statement in October 2023, has stated that he will not announce tax cuts funded by higher borrowing, and the budget will be prudent and responsible for long-term growth.
The Labour government has shown a focus on social and affordable housing, with Chancellor Rachel Reeves announcing a £39 billion affordable housing program over ten years, aiming to build 300,000 new social and affordable homes, with 60% at social rent. The government has also curtailed the Right to Buy scheme by reducing discounts and exempting newbuild social homes from the scheme for 35 years.
Planning reforms have been introduced to facilitate more building, including changes to Compulsory Purchase Orders to allow local authorities to buy land at existing use values. These reforms are expected to result in a significant increase in social and affordable housing supply, potentially reducing housing shortages and prices over time.
Sarah Thompson, managing director at Mortgage Scout, urges the chancellor to focus on lowering interest rates to control inflation and benefit the housing market. Tim Foreman, managing director of land and new homes at Leaders Romans Group, considers supporting first-time buyers a priority due to the difficulties they face in buying a property since the end of the Help to Buy scheme.
While the specific measures for the Spring Budget 2024 are not detailed, the Labour government's emphasis on social and affordable housing suggests that the budget might continue to prioritize these areas, potentially including further funding allocations or policy adjustments to support the affordable housing agenda.
Voters may be pleased with a stamp duty holiday or reprieve, while developers may find eased planning regulations for brownfield sites and conversions favorable. However, there is a challenge in balancing the need to increase housing supply and affordability by supporting developers and private landlords, while also addressing voter concerns about greenfield development.
Stimulus measures may be introduced, but they could create unnecessary froth in the housing market. As the UK continues to navigate its financial crisis, the Spring Budget 2024 is expected to be a critical moment in determining the government's approach to the housing sector and its commitment to addressing the cost-of-living crisis.
- The discussion around the Spring Budget 2024 indicates a potential focus on the government's housing policy, as affordability remains a significant concern for voters.
- Given the Labour government's emphasis on social and affordable housing, we may expect policy adjustments or further funding allocations in the upcoming budget to support this agenda.
- Meanwhile, business leaders such as Sarah Thompson and Tim Foreman stress the importance of policies that lower interest rates and support first-time buyers in the housing market.
