Response to the Spring Statement

The positive news for the property sector in relation to today’s announcement is that the government remains confident that our sector, perhaps more so than any other, has the potential to deliver true economic growth, and in doing so, turn around the country’s economic prospects.  Announcements such as the delay in implementing the Building Safety Levy, the additional funding for the Affordable Homes Programme and for construction training are testament to that.

But there’s much more that needs to be done.

A need for incentives to encourage investment in the property sector

To respond to market demand (let alone compensate for RLSs being unable to take on more affordable housing units and the imminent impacts of the Renters’ Rights Bill) further investment is needed.

I am not suggesting further public investment in bricks and mortar at a time when the government is clearly very stretched to deliver on the basics, but more incentives, fiscal and otherwise, to encourage global investment.

February’s reduction in the Bank of England interest rates was welcome and may encourage more activity, particularly among those already considering property investment. However, given the current market uncertainties (compounded by interest rates being held at 4.5% in March), investors are remaining cautious.

To meet the government’s ambitious housing targets, further change is necessary. For example, incentives across the property market in relation to new Net Zero targets, a comprehensive review of Stamp Duty (which, having hit investors hard in October’s Budget, will hit first time buyers hard next week).

Currently many new build schemes are stalled due to viability issues. While the revised NPPF and Planning and Infrastructure Bill will open up the opportunity for more development – public and private, for sale and for rent, brownfield and greenfield – getting these homes built will require the government to be flexible in planning gain requirements. These can now include up to 50% affordable housing, 10% (or more) biodiversity net gain and substantial Section 106 commitments, alongside increased material and labour costs.

We had hoped to see a reversal of the abolition of Multiple Dwellings Relief (MDR) – this must be a future priority. Currently the abolition of MDR is estimated to have cost the UK 25,000 homes - almost 7% of the government’s 370,000 housing target - while also costing 60,000 jobs. Were the decision to abolish MDR reversed, the BTR sector would have the means of delivering much needed additional units across a variety of tenures, including much-needed later living accommodation.

A recognition of the potential of Build to Rent (BTR)

Attending industry events recently, I have been shocked by a lack of awareness of BTR among politicians. And yet BTR is growing at an unprecedented rate: the British Property Federation recently reported a 23% growth in completed BTR units over the past year alone.

Against the backdrop of the Renters’ Rights Bill and greater regulation for the private rented sector, the BTR sector is emerging as a key solution to the supply-and-demand crisis in the rental sector.

At little cost to the public purse, the government could help further increase the much-needed supply of BTR homes by creating BTR-specific policies, both at a national level (BTR is mentioned just once, briefly, in the current NPPF) and in local plans (which, in failing to include BTR-specific policies, contribute to the lack of awareness and potential misunderstanding of the benefits of BTR).