The Autumn Budget 2024: The Impact on Housing

By Jerry Gilbert · 31 October 2024

Rachel Reeves has delivered the The 2024 Autumn Budget, and there were some key points for the Social Housing sector to note. ARK Director Jerry Gilbert provides his thoughts on these points.

• Ms. Reeves reaffirmed Labour’s pledge to build 1.5 million homes within this Parliament.
• The Chancellor has allocated £5 billion for housing initiatives next year, including a £500 million increase in the Affordable Homes Programme aimed at delivering up to 5,000 additional homes.
• An additional £3 billion will support small and medium-sized enterprises (SMEs) and the Build to Rent sector through housing guarantee schemes.
• Right to Buy discounts will be lowered, and local authorities will now retain full proceeds from sales to help preserve current council housing stock.
• Grant funding of £1.3 billion has also been pledged for local authorities to deliver essential services, of which £233m is earmarked to prevent homelessness and rough sleeping.

Increased Funding: A Commitment to Affordable Housing

This additional income is vital for the affordable housing sector. Beyond the funding itself, the budgetary decision signals a refreshing commitment by the Government to address housing inequality. Enhanced social housing can stimulate the economy by creating jobs in construction and lead to better health outcomes and improved mental health.

A Positive Shift in Political Priority

As a consultancy with over 30 years of experience supporting social landlords, we have seen housing pushed down the political agenda. This change in attitude is to be applauded as much as the additional funding.

Funding Constraints and Rising Challenges

Talking of money, there is never enough to do everything you need to. Being pragmatic rather than ungrateful, rising to the challenge given increasing costs, new and necessary safety, sustainability and quality requirements, labour/skills shortages and land being a finite resource, delivering 5000 additional new homes whilst maintaining affordability for residents is still going to be testing.

The National Crisis of Homelessness and Temporary Housing

It is often quoted that one in fifty Londoners is either homeless or in temporary accommodation, but this is a national problem. The economic and social benefit arguments for addressing this problem are again obvious. The detail of how the £233m to address homelessness and rough sleeping will be distributed is not yet clear and with local authorities running up enormous costs on a monthly basis the “how and when” for accessing funding needs to be made clear quickly.

Stamp Duty and Second Homes: The Impact on Private Rentals

The immediate 2% increase in stamp duty on purchasing second homes, coupled with maintaining current capital gains on disposal appears to be encouraging disposal rather than acquisition, presumably on the assumption this will release more properties from the private rental sector making them accessible to the first-time buyer. What impact this will have on private sector renting is yet to be seen.

Rent Certainty for Sustainable Development

Rent certainty is an important undertaking in the budget, both for those managing homes and for those of us delivering development and regeneration projects. Institutional investors require certainty (no doubt they would prefer a 10-year agreement) and assured return over time will reduce risk and attract more institutional funding into affordable housing, particularly for the larger schemes where cash flow and viability can be challenging.

A Step in the Right Direction

Overall, the funding and other initiatives in the 2024 Autumn Budget are positive steps forward. Although not enough to fully resolve the housing crisis, this budget represents the best opportunity in recent years to make significant progress. The Government’s acknowledgment of affordable housing’s economic, health, and social benefits will hopefully keep it high on the agenda, a crucial factor if we are to build 1.5 million homes over the life of this Parliament.

To speak to our Development team about the Government’s focus on Social Housing and how we can guide and support you to build new homes. Our Housing Strategy and Homelessness team are also available to assist you in these areas. Or for general enquiries, please visit our Contact Page.