Spring Budget Reaction from Wavensmere Homes

Reacting to Jeremy Hunt’s Spring Budget, James Dickens, Managing Director of Birmingham-based housebuilder Wavensmere Homes, said: “Despite the economy expected to grow by 0.8% this year, and inflation being on a clear trajectory back to the Bank of England’s annual target of 2%, the Chancellor’s Budget announcements were simply too little too late. We were hopeful of a reduction in Business Rates and are disappointed this hasn’t been implemented today. 

“The Treasury’s 2% reduction to National Insurance from the autumn will ultimately cost £5bn, but I don’t believe the £75 a month saving to the average working person willmove the economic needle, or make a material difference to voting preferences later this year.

“However, we do welcome the Fuel Duty Freeze extension and 5p cut for another year, and the Household Support Fund continuing at current levels for another six months. We also support the child benefit tax threshold increases and hope the Government’s childcare plan could help to bring much-needed skilled people back into the workforce.

“As a Birmingham-based housebuilder, we support the £100m of Levelling Up funding for cultural projects within the West Midlands.

“The recently announced 12.3% fall in the Energy Price Cap, which takes effect in April will be critical to bringing inflation back to target.

“The ‘in-full’ £2.5bn Public Sector Productivity Plan investment is needed to make a real difference to NHS service delivery and the unacceptable waiting times. The 1% above inflation increase for protected public spending is also welcome to go some way to address the vast shortfalls and lack of investment over successive years. But when will we hear the detail about the cuts to vital – yet unprotected – departments?

“The Chancellor said the Cabinet is committed to building more houses for young people. But, unfortunately it is impossible for this Government to deliver the pledged one million new homes before a General Election is called, as the ground work would need to be underway now across hundreds of thousands of plots.

“It was disheartening to see the Stamp Duty thresholds for owner occupiers unchanged. The only real help first time buyers currently have is the Stamp Duty exemption for homes valued up to £425,000. First time buyers deserve far more assistance than this to access the housing ladder due to massive deposit erosion exacerbating the already challenging situation.

“The Chancellor announced the end of the Furnished Holidays Lettings regime, in favour of long term renters. But the reduction of the higher 28% rate of Capital Gains tax to 24% is unlikely to encourage more property purchases, as it is a long term investment. We do not support today’s abolition of Multiple Dwellings Stamp Duty Relief.

“It was disappointing the £242m of investment in London housing is not being mirrored outside of the M25. Despite the high interest rates, the chronic lack of new homes means it is no surprise that house prices are rising month on month, irrespective of the ongoing issues with mortgage affordability.

“Due to the difficulties vying first time buyers are encountering to obtain a mortgage, the sales rates of the PLC housebuilders – who have largely depended on them – have suffered. To counter this, there have been a number of sizeable deals into the Build To Rent sector. With the Renters Reform Bill seeing some private landlords sell up, I fear hardworking people could see pricey build to rent blocks as their only option. The current market conditions could result in three to four national landlords become an overly dominant oligopoly and able to collude to overinflate rents.

“We are frustrated with the lack of bold action from the Chancellor today. Now this key fiscal event has been delivered, the market is already looking ahead to the next three Bank of England Monetary Policy Committee meetings, in hope the punishing rate of 5.25% will drop before the summer. This could be the only fiscal change that could do the government a favour ahead of the date of the General Election being declared.”

Wavensmere Homes is constructing three major urban regeneration schemes, located in central Birmingham, Derby city centre, and Ipswich, and has five further projects in the immediate pipeline. The Edgbaston-headquartered housebuilder has around 3,500 new homes either under construction or in planning.