AUTUMN BUDGET 2021 FOR THE PROPERTY SECTOR – WILL IT BE ENOUGH TO SATISFY INSULATE BRITAIN?
Peter Cole
Aug, 31 2021Budget Overview: Limited News for Property Sector
As expected, the Budget delivered little for the property sector. It was never intended to tackle the housing shortage, as the Chancellor focused on repairing pandemic-related damage. The positive news is that forecasts from the Office for Budget Responsibility (OBR) have improved: the economy is set to grow faster than predicted, and unemployment is unlikely to rise above 8%.
Key Takeaways from the Autumn Budget
During my commute, I listened to Chancellor Rishi Sunak discuss the Autumn Budget 2021 on LBC. Housing received minimal attention, aside from a new 50% discount in business rates for retail, hospitality, and leisure sectors. Eligible businesses can claim up to £110,000 off their bills.
However, several announcements published yesterday and in recent weeks are worth noting.
Housing Investment: A Step Forward, But Still Short
The government continues to fall short of its pledge to build 300,000 new homes annually by the mid-2020s (243,770 homes were delivered in 2019/20). The Budget allocates £24 billion for housing and £1.8 billion to finance more homes on brownfield land.
This investment is welcome, but its benefits may take years to materialise. While any new funding helps, it remains far below what is needed to deliver affordable housing at scale.
Transport Network Improvements
The government plans major investment in the UK’s transport network. This includes constructing new roads and repairing existing ones. The rail network will also receive funding, with plans to reopen local train stations to improve travel links for remote communities.
Energy and Green Initiatives
The Budget outlines allocations for energy schemes and research into new technologies. On Monday, the UK Infrastructure Bank announced its first investment: £107 million in offshore wind in Teesside.
Recent commitments in the Heat and Building Strategy include £3.9 billion for:
- Social Housing Decarbonisation Fund
- Home Upgrade Grant scheme
- Boiler Upgrade Scheme
- Heat Networks Transformation Programme
However, building engineering groups have criticised the lack of fresh funding and the absence of a replacement for the defunct Green Homes Grant, which supported energy efficiency improvements.
Heat Electrification Revolution
Tabloids have highlighted the heat electrification revolution as a major beneficiary of current funding plans. The government announced £5,000 grants to help approximately 30,000 homes install heat pumps.
These funds target social housing and households earning less than 60% of median income, while also supporting clean heating networks for homes unsuitable for heat pumps.
Ambitious Targets for Heat Pumps
The Budget 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?
Will these measures achieve the Prime Minister’s ambitious green targets? With Insulate Britain activists causing disruption on the M25 to push for faster progress towards net zero, the government may face pressure to do more.
We’ll be watching closely to see what emerges from COP26.