ARK’s review of the 2021 budget

The Chancellor Rishi Sunak unveiled his budget to the House of Commons this afternoon, setting out the government’s tax and spending plans for the year ahead to support economic recovery following the impact of the pandemic.

We were keen to hear how the Chancellor planned to address the biggest challenges facing the sector.

Given the financial impact on people living in high rise blocks following the tragic events at Grenfell we hoped to see additional support offered to people affected by cladding issues. We were also keen to find out how the sector might be supported to deliver zero carbon homes. Unfortunately, neither one of these were mentioned. We are hoping that some of the £15bn earmarked for Green Bonds might be utilised for affordable homes but await the detail.

Whilst the stamp duty holiday extension and the government guarantee on 95% mortgages will no doubt be welcomed and we recognise the Chancellors commitment to construction and house building we feel that they do not really help first time buyers. It is our view that house price inflation is the biggest hurdle for first time buyers so anything helping to fuel that inflation is not good news. That seems counter intuitive but last year house price inflation was 6% (Halifax*) and 8.5% (land registry or around £13,000 – 15,000 for the average priced house). The stamp duty saving on the average priced £231,000 house is around £9,050.

Whilst, as expected, affordable housing barely featured, the budget instead focused on supporting people and businesses, fixing public finance and building a better future economy. Here are our highlights:


  • Stamp duty extension £500k nil rate band till end June, reducing to £250k till end of September, returning to £125K from 1 October
  • Government guarantee on 95% mortgages for buyers with 5% deposit to turn “generation rent into generation buy”
  • £1bn fund to promote regeneration in 45 English towns (and Cities)

People and businesses

  • Unemployment will peak at 6.5%, down from a forecasted peak of 11.9% last July
  • Furlough extended till end September where employees will continue to receive 80% of their wages until the scheme ends with a taper over July, August and September where employers have to pay a greater contribution
  • Support for self-employed people also extended till September
  • National living wage goes up to £8.91 from 1st April
  • £20-a-week increase in Universal Credit will be extended for six months
  • Incentives for apprenticeships increases to £3,000
  • £19m additional funding for domestic violence programs
  • Lifetime commitment and support for veteran’s mental health

Also of interest

  • Green projects will be supported through a £15b green recovery bonds.
  • Treasury will reform the Bank of England’s mandate to include targeting net zero emissions, in addition to the existing 2% inflation target.