£1.8bn for brownfield housing sites welcomed in Sunak’s Autumn Budget

The Chancellor of the Exchequer Rishi Sunak’s Budget announcement of £1.8bn of funding dedicated to development on brownfield sites, as part of its ‘levelling up’ agenda, has been welcomed by the housebuilding sector.

Melanie Leech, chief executive of the British Property Federation commented: “The funding dedicated to brownfield development is a positive commitment to regeneration and will unlock underutilised sites across the country and create new opportunities for SME property investors and developers .

She added: “We will need to see further details in the promised levelling up white paper however to understand how the millions of pounds of investment our sector represents can partner effectively alongside national and local government to deliver the built environment which is critical to levelling up across the country.”

The Budget also included a package of measures on business rates relief, and funding to support local authorities’ transition to a digitalised planning system. Sunak also confirmed that firms who build and continue to own build-to-rent schemes would be exempt from Residential Property Developer Tax. Leech said she “hoped this exemption will extend to all forms of build to rent activity.” The Chancellor re-announced former Housing Secretary Robert Jenrick’s 2020 pledge of £11.5bn pledged for 180,000 affordable homes.

Greg Hill, deputy chief executive, Hill Group, said: “We welcome the news that the Government has set aside almost £2bn for creating housing on brownfield schemes. This can’t come soon enough, particularly in the South East where good useable sites to build homes come at a premium. Our industry can deliver these much-needed homes quickly but we need drastic improvements and a more efficient planning system to make this happen. Investment in land won’t necessarily be the solution. Intervention is needed where the real hold up occurs, which is in planning. I sincerely hope the £65m to develop new software for digitisation of the town planning system will help to address some of the challenges we face.”

Tim Nutt, managing director at Shanly Homes, commented: “Further enhancing neighbourhoods, the creation of 100 ‘pocket parks’ should improve wellbeing in areas that currently lack these facilities.”

Paul Smith, MD of The Strategic Land Group, offered some caveats however: “The extra costs associated with delivering new homes on many brownfield sites often result in wider infrastructure improvements – like news schools and parks – being sacrificed to make development financially viable.

He added: “While it’s welcome to hear that the government is taking steps to help fund housebuilding on brownfield sites, the biggest obstacle is the planning system. The unpredictability and high costs that characterise the current planning system are a barrier to schemes being brought forward of all types, but especially brownfield sites – the smaller uplift from existing use to residential development value, combined with a reluctance from many councils to allow sites to be redeveloped unless they have been vacant for a number of years means that it simply isn’t worth the risk and expense to apply for planning permission for new homes; even on brownfield sites that are perfectly suitable.

“We’re very unlikely to see new homes built on brownfield sites in greater numbers without meaningful changes to the planning system – the economic benefit that would produce for the country dwarfs every other announcement made in today’s Budget. ”

James Thomson, CEO, MJ Gleeson agreed: “We must unblock the planning process and we would urge government to use some of the new £4.8bn announced today for grant funding to be put towards planning departments within local authorities.”

Andy Morris, Managing Director of homebuilder Hayfield commented on the renewable energy announcements in the Budget: “As we are only days away from COP26, it is encouraging to see the Government making advances in more widespread renewable energy creation, such as hydrogen power. With soaring energy price rises affecting us all, we need to lessen our reliance on fossil fuels.”

“The newly announced Green Investment Relief is good news for businesses. Aligned to this, we would welcome further implementation of the Green Homes Grant, enabling existing homes to be retrofitted with the type of technology.”

Director of Benham and Reeves, Marc von Grundherr was not impressed by a perceived lack of focus on the property sector: “It’s 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 having fuelled house prices to record highs via the recent stamp duty holiday.”

He added: As for the £11.5bn pledged for 180,000 affordable homes, it’s a start, but hardly news given it was announced by Robert Jenrick a year ago.”

He concluded: “It simply isn’t enough and with the government consistently failing to meet their previous housebuilding targets, it will be a miracle if we see a brick laid on brownfield land or a meaningful level of affordable homes delivered in our lifetime.”

Managing director of Barrows and Forrester, James Forrester, commented that he saw empty rhetoric and reannouncement from the Chancellor:“Time and time again we’ve seen the Government pledge to fix the housing market using recycled rhetoric and funding from previously announced initiatives. Today was no different and reading between the lines, we can expect to see them continue to over promise and under deliver in their attempts to address the housing crisis.

“While Boris Johnson might not be a fan of recycling, his Chancellor certainly is, and so the 180,000 new homes pledged today is certainly no step forward.

“The only bone thrown to a nation of ravenous homebuyers starved of housing stock has been a scrap of properties built on brownfield sites”.

He concluded: According to the MHCLG, there are some 36,000 hectares of brownfield land across England alone, enough to deliver over 1.3m new homes. So even if the government does make good on its promise, it’s just a fraction of what they could, and should, be building.”

Brian Berry, chief executive of the FMB was disappointed about the lack of focus on green issues for homeowners: “The Chancellor has missed the opportunity to give householders peace of mind about how they can tackle the net zero challenge. With nothing on retrofit for owner occupiers in last week’s Heat and Buildings Strategy, I’m struggling to see how the country will reach its legally binding net zero targets by 2050 if it doesn’t fix the UK’s 29 million leaky homes.”

Berry added however: “I’m glad to see further investment in housing, and warmly welcome the grant funding for local authorities to free up small brownfield sites for housing.”