The Budget was delivered weeks after prime minister Boris Johnson announced his four-step roadmap out of lockdown in England.
Some of the key announcements included the extension of the stamp duty holiday for property worth up to £500,000 until 30th June, with the nil rate band then moving to £250,000 until the end of September; and the launch of the mortgage guarantee, offering lenders a government guarantee when providing 95% mortgages.
Sunak also confirmed the extension of the furlough scheme until the end of September, the introduction of new Restart Grants to help businesses reopen — with non-essential retail able to receive grants of up to £6,000 and hospitality and leisure businesses to receive up to £18,000 — and a new Recovery Loan Scheme to take the place of the BBL and CBIL schemes, enabling businesses of any size to apply for loans from £25,000 to £10m through to the end of this year.
In 2021, the rate of corporation tax, paid on company profits, will increase to 25%. Sunak also announced a Small Profits Rate for small businesses, maintained at 19% for those with profits of £50,000 or less.
Property market responds to the Budget 2021
Paul Brocklehurst, chairman at The Land Promoters and Developers Federaton (LPFD):
“While we welcome the extension of the stamp duty holiday and the introduction of a mortgage guarantee scheme, which will support demand for housing and make it easier to buy a house, the problem remains that there are not enough new homes being built.
“It is clear that we need to build more houses. The social and economic consequences of the housing crisis are holding back our economy and we need to do more to unlock supply. We hold out hope that the government will do more to boost the supply in the short- to medium-term by ensuring that Local Plans are brought forward and that the National Planning Policy Framework is amended through the latest consultation process to ensure that the delivery of housing is boosted.”
Roxana Mohammadian-Molina, CSO at Blend Network
"Unsurprisingly, the housing market featured heavily in Sunak’s spring Budget as he laid out the UK’s Covid-19 response. We join in welcoming measures that allow an increasing number of first-time buyers get their feet on the property ladder. However, as development finance lenders working closely with SME property developers trying to channel much-needed funding into new housing, we urge the government to also consider measures that tackle the supply side of the property market. Failure of doing so will risk further deepening the existing affordability gap that continues to price first-time buyers out from the market. Fuelling demand without addressing shortage of housing supply risks creating a ticking timebomb by further inflating prices in the medium- to long-term.
"One concrete and effective way for the government to support housebuilding is by working with alternative lenders to channel funding to SME property developers and, Homes England, with its mandate to lend to SME developers, is a perfect tool for the government to work with the private sector. We are strong advocates of fund structures whereby Homes England [could] deploy money through alternative lenders and P2P property lending platforms."
Clive Docwra, managing director of property and construction consultancy McBains:
“We recognise the chancellor’s hands were tied by the extent of the Covid crisis but, unless there is anything in the small print of the Red Book, there was little specific announced for the construction sector given that the government has made ‘build back better’ its mantra for recovery.
“The ‘super deduction’ in tax may encourage construction firms to invest, while the reintroduction of 95% mortgages, and extending their availability beyond first time buyers, could trigger a revival of the housebuilding sector.
“But we’re disappointed that it appears green retrofit schemes, such as the Green Homes Grant, were not renewed, as [these] programmes not only help contribute to carbon net-zero targets, but provide a lifeline to many construction firms in terms of maintenance contracts. On a macro-level, we’d have also liked to have seen a bigger commitment to wider green initiatives to help encourage the industry to move towards net-zero.
“And while the chancellor may have introduced a fast-track visa scheme for high-skilled workers in the tech sector, we’d have welcomed similar applying to the construction industry, because a combination of Brexit and Covid has led to an exodus of high-skilled construction workers from the EU and elsewhere. The doubling of payments to employers for taking on trainees may encourage more firms to take on replacements, however.”
Richard Simpson chief executive at Watkin Jones:
“The government’s focus on revitalising high streets following the pandemic is very welcome, but their recovery will require more than a short-term boost and drive for homeownership. For towns and cities to thrive, they will have to offer a diverse and adaptable retail, social and living experience that recognises the cultural changes over the last 30 years.
“Levelling up sustainable urban centres can only be achieved with more balanced rhetoric that recognises and encourages high-quality rental homes as part of the UK’s housing culture. By supporting build-to-rent as a mainstream housing choice, government can attract the long-term institutional investment and thinking to maintain high streets as attractive places to live and visit through the recovery and beyond.”
Brian Berry, chief executive at the FMB:
“In the year of COP26, the chancellor missed an opportunity in [the] Budget to show global leadership with a long-term plan to make our homes greener, healthier, and more affordable to run. The government’s commitment to green growth must include backing for a National Retrofit Strategy — an oven-ready infrastructure plan that will tackle climate change, level up and create jobs. While we welcome the funding announced for the UK Infrastructure Bank, we expect to see it use its focus on climate change and regional growth to back Britain’s army of small builders who stand ready to help build back better, and greener.
“What’s needed now is increased investment in local authority planning departments so that we can get shovels in the ground on small sites. The doubling of support for businesses who hire an apprentice is also a win for the FMB. 71% of construction apprentices are trained by SME firms, and the extra support for my members is welcome.”
Dean Clifford, co-founder of Great Marlborough Estates:
“Extending the stamp duty holiday is welcome news and highlights the importance of homeownership from both an economic and society-wide issue in the UK. The vast majority of first-time buyers are already exempt from paying stamp duty and the tax is widely regarded by economists and other policymakers as hampering economic growth.
“The government should also consider abandoning its plans to levy additional stamp duty on overseas buyers this year, which will send a positive message to international investors that we are a 'global Britain' post-Brexit."
Jess Mitchell, office manager at Nottinghamshire estate agent Gascoines:
“Following the initial government announcement to introduce a stamp duty holiday, the market saw house hunters relieved of costs and induced a mini housing boom as sellers were eager to take advantage and complete transactions in time.
“Rishi Sunak initially set the holiday, which extended to properties under £500,000, to end on 31st March 2021 but has announced the deadline will now be extended to 30th June with the nil-rate then lowered to £250,000 until the end of September. We’re therefore expecting to see a high number of properties listed over the coming weeks and offers placed in very short time periods, from now until September, to really make the most of the extension.
“My advice would be to always aim for higher than your deposit and if possible, have this ready – along with a mortgage in principle – before you start looking for a house and seek advice from your local estate agents or mortgage advisers.”
Mark Hawthorn, CEO at LDS:
“Last year, the prime minister unveiled an agenda to ‘build, build, build’.
“When it comes to housing, this Budget encourages people to ‘buy, buy, buy’ homes through the extension of the stamp duty cut and the mortgage guarantee scheme. There is much less to help housebuilders and developers supply new homes. However, 'help to supply' is more important than 'help to buy' if we are going to fix the broken housing market.
"The government needs to provide more support for SME housebuilders as it will improve the supply of new homes and help create additional jobs."
James Talman, chief executive at NFRC:
“The chancellor has set out a solid investment-led economic roadmap in his Budget that supports the UK economy as it comes out of lockdown and into recovery. He is right to focus on tax incentives, many of which will help boost construction — particularly the extension to the cut in stamp duty, the ‘super deduction’ for companies that invest in plant and machinery, and the enhanced ‘Structures and Buildings Allowance’ at Freeports.
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“However, the chancellor can and must go further to encourage investment, not only to help the economy grow but to ensure we make our buildings fit for the future. To spur on investment in the upgrading of commercial buildings, he should extend his ‘super deduction’ policy so that it applies not only to plant and machinery but to buildings too. This will help businesses to not only bring down their energy bills but also to support the UK to reach its net-zero target.”
Steven Charlton, managing director at Perkins&Will London:
“It is great to see the government thinking at all angles to help create funding for green jobs and technology that is necessary for the UK to reach its net-zero targets. However, it's not just the investment community which needs to focus on this.
“Designers, architects and developers have a huge responsibility to ensure the next generation of buildings have the sustainability credentials needed to operate at zero carbon.
“Alongside delivering net-zero new homes and buildings, updating the insides of existing offices, shops and hotels will be just as vital to reaching the UK’s 2050 net-zero targets.
“The extra funding to help progress the prime minister’s 10-point plan for a green industrial revolution also provides a valuable opportunity for the government to educate industries on the definition of ‘net-zero’; encouraging a focus on both operational and embodied carbon will be vital.
“The government should recognise that innovative design can play a fundamental role in significantly reducing a building’s environmental footprint and creating places that are truly energy efficient from cradle to grave.”
Mark Booth, managing director at homebuilder Hayfield:
“The introduction of government guarantees for lenders who offer 95% mortgage products to those buying a home under £600,000 will be a big financial help to lots of people who are looking to move onto or up the property ladder. The Covid-19 pandemic has seen everyone spend more time at home than ever before. Moving to a beautiful new home with modern living space, purpose-designed workspace and easy access to the great outdoors will now be within the affordability of more buyers. This is particularly the case for renters who can be trapped paying high monthly rental payments, which makes saving for a deposit very challenging.
“We were also encouraged by the chancellor’s climate change measures, as protecting our planet for future generations is at the centre of Hayfield’s Green Revolution Pledge. We welcome the new initiatives the government is instigating to significantly reduce carbon emissions and create greener homes across the board.”
Dave Sheridan, executive chairman at modular housebuilder Ilke Homes:
“The government’s new ‘MMC taskforce’ is a sign that ministers continue to place their faith in offsite manufacturing as a means of ramping up housing delivery, creating green skills and lowering emissions from the UK’s housing stock.
“Encouraging more developers, investors, councils and housing associations to increase their uptake of offsite manufacturing will not only be vital in the UK economy’s efforts to reach net-zero, but also to avoid costly retrofitting programmes later down the line, as the products we deliver already exceed current and soon-to-be-introduced building regulations.”
Jordan Rosenhaus, chief executive at modular housebuilder TopHat:
“I welcome Rishi Sunak’s green-tinged Budget, but it was disappointing to see that policymakers are still failing to address the problems caused by consumers’ unwillingness to change old habits — especially in relation to how they live in their homes.
“Changing decades-old habits is not going to be easy, but it is vital.
“For a step change to happen now, it will require a cocktail of government grants and incentives — not like the Green Homes Grant, which has crashed and burned, but more like basing a home’s council tax bill on its energy performance. Lower stamp duty for properties with higher Energy Performance Certificate ratings is also an example of how to encourage developers to improve the energy performance of their new homes. This would echo the tax incentives available to the motor industry and electric cars.”
Antony Crovella, sales and marketing director at Meyer Homes:
“It’s great news to hear that the stamp duty holiday has been extended, particularly for Gabriel Square in St Albans, where we have sold extremely well over the past year and all of our buyers were keen to take advantage of the stamp duty benefit. With recent issues with the deadline and delays with lawyers and so on, we had a couple of buyers who were looking to pull out if they missed the deadline, so this will now mean they can still look to progress with the sale.”
Greg Hill, deputy chief executive at Hill Group:
“The chancellor’s Budget clearly demonstrates the government’s commitment to helping people onto the property market and into their own home. The stamp duty extension will not only help buyers currently caught in the completion trap, but also give a window of opportunity to additional buyers looking to move.
“The launch of the government-backed 95% LTV mortgage scheme significantly reinforces this commitment by opening up the market to hundreds of thousands more buyers, offering an essential route to home ownership at a critical point in this country’s recovery from the pandemic.”
Tim Nutt, residential managing director at Shanly Homes:
“It’s excellent news that the chancellor has announced extra help for the property market in the spring Budget. The extension to the stamp duty holiday spells good news for many homebuyers that were worried they would not be able to complete on their property by the March deadline, due to a magnificent demand.
“The 5% mortgage scheme will also add some reassurance to first-time buyers who are looking to get a foot onto the property ladder, but are struggling with securing a lender.”
Katy Jordan, managing director at Storey Homes:
“As a SME housebuilder committed to delivering much needed quality new homes and improving people’s lives, we fully welcome the announcements. Extending the stamp duty holiday coupled with lowering the threshold for a further period will help unblock the housing market considerably and support families and first-time buyers to progress up and onto the housing ladder.
“Homes continue to play an integral part of our security and future, so championing those who have not quite managed to make that first step with 95% mortgages provides further hope and a much-needed practical boost that will make a difference. Without first-time buyers, the market becomes stagnant, so giving them the confidence to achieve homeownership will also stimulate the market long term.”
Paul Smee, non-executive chair at the Conveyancing Association:
“The chancellor has recognised the economic boost which an active housing market gives to the wider economy and we are pleased he is not bringing the support of stamp duty relief to an abrupt conclusion at the end of March. A tapered reduction to the relief which we have long advocated will help avoid cliff edges in October. The conveyancing sector does, however, face real challenges in meeting the likely volumes of transactions over the next few months but is ready to rise to the challenge.”
Sarwjit Sambhi, CEO at St Modwen Properties:
“The high levels of demand the property market is currently experiencing shows the impact this tax can have on both first-time buyers’ and homeowners’ ability to move, which begs the question as to whether evolving or potentially scrapping stamp duty should be next on the agenda.
“We’ll wait to see how the new mortgage guarantee scheme performs in helping first timers get their foot on the property ladder but any stimulus is welcome. If it helps people buy their first home, then hopefully it is enough to keep the market moving once both the stamp duty holiday and the furlough scheme come to an end later this year.”
Mark Hayward, chief policy adviser at Propertymark:
“The extension of the stamp duty holiday to the end of June followed by the transition to the end of September is much needed to help prevent sales falling through as the initial deadline approaches. We urge the governments in Scotland and Wales to follow the UK government’s lead on this. We know from our own research that failed sales cost estate agents more than £4,000 per sale and consumers more than £1,500, which is why we have called on the government to rethink the stamp duty holiday timings. This is good news for the market and will help maintain consumer confidence who are seeking to buy and sell in the coming months.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“As always with Budgets, it is just as much what’s in it as what’s not, or emerges in the small print soon after, which counts.
“The biggest test is does the Budget help maintain or even improve the number of transactions and investment without adding to upwards pressure on prices? And, at the same time, encourage the building of more new homes, particularly affordable ones? I have to say the chancellor probably gets ‘B' or ‘B-minus’ on his report card as the stamp duty extension, including the tapering, is welcome, but there will be another mini cliff-edge in the autumn when this latest holiday finally comes to an end.”