AUTUMN BUDGET 2021 FOR THE PROPERTY SECTOR – WILL IT BE ENOUGH TO SATISFY INSULATE BRITAIN?
Peter Cole
Aug, 31 2021 4 min readAs expected, the Budget was light on news for those in the property sector. This was never going to be a budget that really tackles our housing shortage, as the Chancellor’s focus was on repairing damage done from the pandemic. The good news is that all the forecasts from the Office for Budget Responsibility (OBR) have improved with the economy set to grow faster than initially predicted, and unemployment unlikely to rise above 8%.
I listened to Chancellor Rishi Sunak discussing the Autumn Budget 2021 on LBC during my commute and there was little raised on housing aside from a new 50% discount in business rates in the retail, hospitality, and leisure sectors, with eligible businesses able to claim a discount on their bills, up to a maximum of £110,000. However, there were a few interesting announcements published yesterday and over the last few weeks.
With the government still falling short of their pledge to build 300,000 new homes a year by the mid 2020s (243,770 homes were delivered in 2019/20), there was an allocation of £24 billion for housing and £1.8 billion in funding to finance more homes on brownfield land. This is a welcomed move but the benefits of this may not be felt for years. Any new investment in housing is to be welcomed but the current funding is still well short of what is needed to provide the affordable housing required to meet demand.
The government is also keen to improve the transport network across the UK and has announced that it will be making a major investment in the road network, both in terms of the construction of new roads, and repairing existing ones. The rail network will also receive investment, with the aim of re-opening a number of local train stations to improve travel links for more remote communities.
There are details in the budget on where funds are being allocated to particular energy schemes and research and development into new energy technologies. Notably, on Monday, the new UK Infrastructure Bank announced its first ever investment of £107m in offshore wind in Teesside. There have been various announcements in the build up to yesterday’s Budget, which included commitments published last week in the recent Heat and Building Strategy; a pledge of £3.9bn is being put towards the Social Housing Decarbonisation Fund, the Home Upgrade Grant scheme, the Boiler Upgrade Scheme and the Heat Networks Transformation Programme. However, there has been some criticism from a range of building engineering groups over a lack of fresh funding or a recognition of a need to replace the now defunct Green Homes Grant to fund energy efficiency improvements in buildings.
What you would have seen most prominent in the tabloids is the heat electrification revolution which is set to be a major beneficiary of current funding plans, notably with the recent announcement of £5,000 grants to aid approx. 30,000 homes to install heat pumps. It’s important to note that this allocation of funds will be directed at social housing and for those on low incomes i.e. less than 60% of the average median income; though it does aim to help provide clean heating networks for homes that are unsuitable for heat pumps.
There is hope for further growth in this area as in the budget it states; “The government is investing £450 million to grow the heat pump market in England and Wales as part of the ambition to work with industry to reduce the costs of heat pumps by 25-50 per cent by 2025. The Budget and Spending Review continues support for heat networks in England with £338 million to encourage private investment. These measures will help meet the government’s target of installing 600,000 heat pumps per annum by 2028.”
Is this enough to achieve our PM’s ambitious targets in the green revolution? With activists from Insulate Britain causing continued disruption on the M25 hoping to promote a faster move to net zero, the government maybe pressured to do more. We wait to see what is discussed at COP26.
