Homebuilding Insight: Self Build and Renovating Experts Reveal Spring Budget 2020 Goals

Homebuilding Insight: Self Build and Renovating Experts Reveal Spring Budget 2020 Goals

The 2020 Spring Budget will be delivered on 11 March by new chancellor Rishi Sunak, and the ubiquitous question within the homebuilding industry is: what measures, if any, are going to be introduced for self builders (including those who custom build) and those planning on renovating a house?

The Conservative Party was the only major political party to reference self build within its 2019 General Election manifesto. Specifically, it promised to help first-time self builders access the Help to Buy scheme using 5% deposit mortgages. The manifesto also promised to: “support community housing by helping people who want to build their own homes find plots of land”.

The details behind the pledges were sparse, so all eyes will be on the Spring Budget reveal to see whether these will be fleshed out. Following the appointment of Christopher Pincher as housing minister last month, it will be interesting to observe whether his influence is reflected in the report. 

Homebuilding & Renovating spoke with industry experts as to what they want to see in the Spring Budget 2020, and what needs to change for self builders and renovators.

Making it Easier For Aspiring Homebuilders

Andrew Baddeley-Chappell, chief executive of the National Custom and Self Build Association (NaCSBA), says one of the key announcements that they are waiting for relates to Help to Buy equity loan, and the opening up of the custom and self build market to those with smaller deposits, seven years after the scheme was first unveiled.

This is one of a number of early measures from Government that is needed, NaCSBA says. These include challenging the dirty tricks of local authorities regarding the Right to Build registers, which provide evidence to local authorities about how many people want to build or commission their own home locally.

NaCSBA recently reported unacceptable practices from some local authorities, such as charging excessive fees to join registers and denying those living outside an authority the opportunity to build a home there, whilst no such constraints applied to the purchase of homes built by builders.

Baddeley-Chappell told Homebuilding & Renovating: “We were extremely pleased to see that the Conservative Party manifesto contained clear commitments to provide greater support for the growth of our sector. And our view has always been that the sooner that support arrives the sooner the benefit will flow through. The Budget is the obvious first date for that support to start be made clear.”

NaCSBA has proposed the introduction of a Help to Build equity loan scheme for self builders which would address the lack of access to the current scheme. Noting that Help to Buy, in its current form, is unfit for custom and self build because it relies on a single payment to the builder on the completion of the purchase of a property, whereas self build typically involves multiple payments to different parties, not least for land and construction.

Baddeley-Chappell wants to see a package of other measures introduced to make the homebuilding process easier for self builders.

“Action is urgently required to address the Right to Build legislation that is currently resulting in a minority of local authorities undertaking dirty tricks to deny the opportunity for people to build their own home.

“We’d like to see active work from Homes England to bring about more plots for custom and self build, in particular in areas in the north where land prices make developers more reluctant to develop, but houses more affordable to self build.

“More technical changes are also required to the taxation regime to end some unintended differences that favour speculative new build over a self and custom build approach.”

Affordable Homes and VAT Concerns

The Conservatives pledged to build a million new homes over the lifetime of the parliament, yet with the delivery of affordable homes stagnating in recent years, and the government’s proposed First Homes scheme drawing criticism that it may actually prevent affordable homes being built, there is concern as to how the government plans to meet its target. 

Brian Berry, chief executive of the Federation of Master Builders (FMB), told Homebuilding & Renovating: “It’s really good news that the government has pledged a million new homes over the lifetime of the parliament, but our concern is about who’s actually going to build them – particularly as a lot of small and medium-sized housebuilders have been driven out of the market – so we’re looking to see a more diverse housing market to build the homes that are needed.

“Also, because we need greater choice in the housing market, we need to think about people wanting to build their own homes, and the rise of modular homes. There ought to be some form of financial help, such as an extension of the Help to Buy, to those who want to build their own home.”

VAT Changes to Benefit Renovators

The FMB also wants to see changes to VAT on repair and maintenance work, which could have a transformative effect on renovators. “Cutting VAT on repair and maintenance work would be significant,” said Berry. “It’s 20% at the moment so getting that down to 10-5%, ideally, would be a great boost for small builders, and also helping to improve the quality of our building stock.” 

Additionally, the FMB has called for increased commitment to reducing carbon emissions within the housebuilding industry. “Given that 40% of carbon emissions come from our building stock, the government will need to make sure that existing buildings are upgraded, so that means having some sort of national retrofit energy efficiency upgrade strategy, with some incentives for the government to encourage that to happen.”

Homebuilding & Renovating will be staying on top of developments with the Spring Budget and report on what the outcomes mean for self builders and renovators

This post first appeared on https://www.homebuilding.co.uk

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