A Budget for Building?

The budget sets the scene for continued robust demand for new homes, with better access for first-time buyers

Among the necessary focus on financial support for people most affected by the COVID pandemic, there was very positive news for the housebuilding sector in the spring budget. 

A double boost is provided by an extension to the stamp duty holiday and the announcement of mortgage guarantees, effectively reintroducing the 95% mortgage.

Way back before the second wave of the pandemic, the Prime Minister suggested that the focus should be for Britain to build its way back to economic recovery. This budget does seem to support that aim.

The mortgage guarantee scheme should provide an effective alternative for those housebuyers no longer eligible for the Help to Buy scheme and increase the number of buyers who can access low deposit mortgages.

We have seen the impact of the stamp duty holiday on the housing market over the summer, so an extension is certainly welcome. There is also speculation that this may be paving the way for the eventual abolition of this tax – which would undoubtedly encourage more frequent transactions and build long term energy into the housing market.

It’s great to see Government putting its weight behind initiatives to support housebuilding. 
Government is also continuing to support a move to MMC construction   with the establishment of a MMC Taskforce, backed by £10million of seed funding, to accelerate the delivery of MMC homes in England.

The financial package should support a positive housebuilding market for 2021 – and the recent rises in the share prices of the major players suggest that the financial markets agree.

With the economy continuing to need interventions, it makes perfect sense to focus investment on a sector that brings such immediate local benefits. Every £1 spent on construction is estimated by the CBI to create £2.92 of value to the UK. 

It seems that the treasury has got that message loud and clear.