Autumn Budget 2021: How the industry reacted

Chancellor Rishi Sunak has announced his Autumn Budget in the House of Commons, promising an “age of optimism”. But industry responses are so far mixed. Marc von Grundherr, director of Benham and Reeves, said it was “disappointing to see such a brief mention for the UK property market in today’s Budget”. “The chancellor has chosen to give the sector a bit of the cold shoulder with just a handful of headline figures, clearly believing his job is done.” But Jamie Johnson, chief executive of FJP Investment, said: “While today’s Budget may seem light on the property front, if anything this is a testament to the market’s resilience and strong performance throughout the pandemic.” Brownfield pledge A pledge to launch a £1.8bn fund to redevelop brownfield land was welcomed by many. Nick Whitten, head of residential and living research at JLL, said the investment would “push developers away from the most expensive city centre locations” to build in lower-value regeneration areas. “This will create a great opportunity to build desirable, sustainable new urban villages within easy commuting distance of the UK’s major economic hubs.” Tom Brown, managing director of real estate at Ingenious, said: “The chancellor’s commitment to invest £1.8bn in brownfield urban land regeneration, which is the equivalent of 2,000 football pitches, is welcome. If channelled effectively, this could improve the lives of millions of people across the country, providing much-needed new housing and spaces in areas that have been neglected for too long.” But Stuart Andrews, national head of planning at Eversheds Sutherland, said: “Funding new housing on brownfield sites is the reimagination of John Prescott’s policy initiative from the 1990s and, while politically laudable, it has never been a game-changer in meeting housing needs.” “You can also ‘level-up’ to your heart’s desire, but it doesn’t meet housing needs in response to very well established demographic pressures. These announcements simply paper over these very significant cracks in the system, and when it comes to housing delivery, the big issue for the government is what it will now do with the assessment and prescription of future housing numbers.” Anna Ward, senior research analyst at Knight Frank, said: “The government’s confirmation of a £1.8bn brownfield fund will help alleviate some of the impact of the pandemic on new homes output. As ever, the devil will be in the detail. There are question marks over how quickly this can be rolled out and which areas it will target to help ease housing shortages.” Jordan Rosenhaus, chief executive at Goldman Sachs-backed modular housing firm TopHat, said the fund “proves that sweeping planning reforms are anything but dead under Gove”. Dean Clifford, co-founder of Great Marlborough Estates, said: “Funding to unlock brownfield sites and a digitised planning system are welcome initiatives, but they are only a small step towards delivering what is needed to meet the government’s own ambitious house building targets.” But he added that the government should push for a requirement that would mean more of the homes being built on brownfield sites are manufactured off site. Peter Hawthorne, chief executive at LCR, said the government should combine efforts to bring forward brownfield land with the planned transformation of regional transport hubs, which will lead to freeing-up more brownfield land and more homes. “There is space for tens of thousands of homes on brownfield sites surrounding the UK’s railway network,” he said. “The £7bn in funding for regional transport transformation also announced by the chancellor should help on this front, freeing up more of the brownfield land surrounding transport hubs for development to create homes, regenerate communities and drive levelling up.” Missed opportunities Joseph Daniels, chief executive and founder of Etopia Group and an independent adviser to the government on helping house building reach net zero, was more circumspect. He said: “In solving one problem, it’s important that ministers don’t add to another. “Ministers must mandate that homes being delivered as part of this fund are some of the country’s most energy-efficient in order to avoid future retrofit costs,” he insisted. Ben Woolman, director at developer Woolbro Group, said the Budget was a “disappointing missed opportunity”, as the chancellor made no announcement committing to turn “generation rent into generation buy”. He added: “While brownfield development should absolutely form a central component of planning reform, the £1.8bn announced today for the redevelopment of derelict or unused land is only expected to deliver around 160,000 new homes— despite the government’s own target being 300,000 per year.” “The Treasury reckons that 160,000 homes could be built on brownfield land across the UK,” Rosenhaus said. “However, if anything, these estimations are too conservative. Either way, the government is rightly providing an opportunity for developers to transform neglected urban spaces.” Charles Begley, executive director of the London Property Alliance, said: “The confirmation of a £6.9bn funding package, which takes forward many of our recommendations on improving inter-city connectivity across city regions, will provide a boost to our cities and help enable them to fulfil the potential of the talent and skills of businesses and people throughout the country. Continued investment in all cities, including London, is critical to the economic and social prosperity of the UK, particularly as we continue to recover from the pandemic.” JLL’s Whitten said additional funding to digitise planning was welcome. “The current system is archaic to say the least and the £12m funding announced in last year’s Budget barely scratched the surface of the scale of the project required. A modern, tech-driven planning system will increase the transparency of the process and has the potential to expedite development activity.” Chris Druce, senior research analyst at Knight Frank, said: “Today’s Budget set out the road beyond the pandemic against an improving UK economic picture. It did so without introducing any significant speed bumps for the UK housing sector, which should continue its journey back to normality in the coming months.” But there were a number of missed opportunities. Chief among those was the decision to avoid imposing a tax on the e-commerce sector, according to Unibail-Rodamco-Westfield’s UK chief operating officer, Scott Parsons, who described it as “another blow”. “Bricks-and-mortar retailers continue to operate on an uneven playing field,” he said. “Of the £7.9bn that was raised through retail business rates in 2019/20, just over 5% was raised from online retailers who, at the time, represented approximately 25% of sales. We challenge this government to be brave and smart enough to come up with a solution so our high streets don’t have to shoulder virtually all of the tax burden for the retail industry and online pays its fair share.” Victoria Vyvyan, vice president of the Country, Land & Business Association, said the Budget showed the government has “no plan to create prosperity in rural areas” adding it also had “no ambition to show what the countryside could be – a vibrant part of the economy that creates jobs and encourages entrepreneurship, all the while building strong communities where people can afford to live”. “The announcement to build more homes on brownfield sites might make sense, but given less than 10% of available sites are in rural areas it will do nothing to ease the rural housing crisis.” Geeta Nanda OBE, chair of the G15 group of London’s largest housing associations, hailed the brownfield fund but said that not providing a “comprehensive solution to the building safety crisis” was also a “missed opportunity”. Josie Parsons, chief executive of Local Space, added: “While we recognise, and acknowledge, the significant support the government has provided during the pandemic to those who are homeless or facing homelessness, we believe that the budget and spending review represents a real missed opportunity to build upon the progress made.”   To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Image © James Veysey/Shutterstock