Spring Budget 2024 - Missed opportunity for housing crisis?

The Spring Budget 2024, as unveiled by Chancellor Jeremy Hunt, was anticipated with high hopes by the real estate sector, particularly with regard to housing. However, the outcome has left many feeling underwhelmed and has sparked a critical reevaluation of the government's commitment to addressing the UK's housing crisis.

At the heart of the disappointment is the government's approach—or lack thereof—to fundamentally address the deep-seated issues plaguing the housing market. The budget's focus on levelling-up funding, devolution, and investment in life sciences, while commendable in their own rights, sidesteps the urgent reforms needed in housing delivery and affordability. Notably, the axing of the multiple dwellings relief (MDR) has been met with particular criticism. Introduced as a tax break to bolster the build-to-rent (BTR) market and private rented sector, its removal is perceived as a setback for long-term investment in professionally managed rental homes, at a time when such investment is crucially needed.

Critics argue that the budget's measures fall short of laying out a bold strategy for delivering the homes needed across the country. The BTR sector, which has been bracing for a hit, finds itself at a crossroads, with the abolition of SDLT MDR likely to hinder, rather than stimulate, the efficiency of the housing market. This decision seems to contradict the government's previously stated ambitions to encourage more long-term investment into the housing sector, especially in professionally managed rental homes.

The planning system, often cited as the biggest obstacle to new home delivery, was conspicuously absent from meaningful reform in the budget. Industry leaders have long advocated for an overhaul of the planning system to facilitate the construction of the 300,000 new homes per year that the government itself estimates are needed. Yet, the budget did not seize the opportunity to put housing front and centre, to invest in, and simplify, the planning system to deliver the new homes the country is desperately crying out for.

The ongoing lack of movement on fundamental business rates reform was another point of contention. The retail and leisure sectors, already under considerable strain, had hoped for significant reforms to alleviate their burdens. Instead, the budget's silence on this issue and the decision to extend the reset period for empty property relief from six to thirteen weeks have been criticised as measures that will likely exacerbate vacancies and deter property investment in an already distressed market.

It appears that the Spring Budget 2024 presents a missed opportunity to meaningfully address the UK's housing crisis. While the focus on certain sectors and tax adjustments may bring incremental benefits, the lack of a comprehensive strategy for housing reform suggests a dissonance between the government's stated goals and its policy actions. As the real estate sector grapples with these challenges, it becomes increasingly clear that a recalibration of priorities is necessary. A more focused, innovative approach to housing policy could unlock the potential of the housing market, facilitating not only economic growth but also ensuring that the right to a decent, affordable home is attainable for all citizens.

To genuinely tackle the housing crisis, the government must prioritise reforms that encourage the delivery of a mix of housing types, address affordability issues head-on, and streamline the planning process. Without such measures, the vision of a balanced, accessible housing market remains elusive, and the dream of homeownership will continue to be out of reach for many.