November budget – what does it mean for housing?

November budget – what does it mean for housing?

Philip Hammond has delivered his second Budget as chancellor, and in his speech he addressed the housing crisis.

“Solving the housing challenge takes more than money”, the chancellor said, and confirmed he is planning reform.

The chancellor committed to £44bn for housing through capital funding, loans and guarantees, and said the funds will include an extra £2.7bn to more than double the Housing Infrastructure Fund.

By the mid-2020s there should be 300,000 homes being built a year - the highest level since the 1970s – in an effort to make them more affordable. This number is accepted by experts as the number needed to meet demand, but there is doubt that this will make a significant difference to prices, even though Stamp duty is to be abolished immediately for first-time buyers purchasing properties worth up to £300,000.

The proposed building will focus on the urban areas - where, according to the chancellor, people want to live and where most jobs are created.

Hammond also said the government is committing to building homes in the Oxford-Cambridge corridor, and that required infrastructure will be built to support new homes.

So what does this mean for the construction industry? There could be cause to be cautiously optimistic. As the chancellor commits to building 300,000 homes a year the industry can gear itself to a rise in projects, their value and the speed they will be awarded – however with Brexit looming in sight the shortage of workers might become an issue. The free movement of labour between the UK and other EU member states has always been a valuable asset to the construction industry – with a significant number of skilled and non-skilled roles filled by non-UK nationals.

The UK construction industry could lose more than 175,000 EU workers – or 8% of the sector’s workforce – if the country does not retain access to the European single market after Brexit, or leaves without a bespoke deal. Such an outcome could put key infrastructure and construction projects at risk at a time when the sector is also facing other pressures.

What do you think? Is the budget good news for the construction industry? Share your views on our Linkedin post.

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