The November 2020 spending review in brief: Key highlights for registered providers27/11/20
Chancellor Rishi Sunak used his November 2020 spending review to announce a number of initiatives to help get the country through the COVID-19 pandemic, including an extra £2.3 billion for the government’s housing budgets over the next four years as part of the National Home Building Fund as well as a £4 billion “levelling up” fund to elevate the country’s infrastructure. Despite there being less of a focus on housing overall at this review, these initiatives will be gladly welcomed by the social housing sector. We set out a summary of the key highlights from the spending review below.
National Home Building Fund (NHBF)
The key announcement for the housing sector at this review was the Chancellor unveiling a £7.1 billion NHBF, which the government claims will “unlock up to 860,000 homes”. This investment will be spread over four years and is in addition to the government’s £12.2 billion multi-year extension of the Affordable Homes Programme already announced in the Chancellor’s budget statement back in March. This takes the government’s total capital housing investment to just short of £20 billion.
The NHBF includes:
- £4.8 billion of previously announced capital grant funding for land remediation, infrastructure investment and land assembly.
- A sum of £100 million will also go to non-mayoral combined authorities for supporting housing delivery, including the regeneration of estates and remediation of brownfield sites.
- The bulk of the remaining £2.2 billion will be in the form of loan finance for house builders large and small. This will enable the sector to build much-needed homes as well as increasing certainty in the market.
Further details about the NHBF will be confirmed at the next multi-year spending review.
Levelling up fund
Elsewhere, as part of the government’s pledge to spread wealth beyond London and the South East, proposals have been released for a £4 billion “levelling up” fund that local councils will be able to bid for in order to finance specific projects such as new roads, improved railway stations, museums and libraries. This fund, together with the creation of a “national infrastructure bank” headquartered in the north of England to catalyse private investment in projects, will help drive growth and regeneration in areas that have received less government investment in recent years. These transport and infrastructure upgrades have the potential to kick-start stalled housing developments and unlock new homes in areas of the country that may have previously been inhabited due to substandard connectivity.
Additional funding for homelessness
An additional £151 million has been allocated to tackling homelessness in England, taking total funding for 2021-2022 to £250 million. This additional funding will seek to help those on lower incomes into home ownership and reduce rough sleeping at a time when concerns grow for the homeless as winter draws near, during a second wave of COVID-19 and where we expect to see the economic effects of the pandemic lead to rising levels of unemployment and financial hardship.
Stamp Duty Land Tax (SDLT)
The property sector will have been calling out for further clarity and an update on the stamp duty holiday, which has delivered a much-needed boost to the housing market in the midst of the ongoing COVID-19 crisis since being announced in July. However, no update was given by the Chancellor on whether there would be an extension of the temporary reduced SDLT rates past the cut-off date of 31 March 2021.
Further announcements on stamp duty and the proposed doubling of capital gains tax will be expected at the March 2021 Budget.
How can Capsticks help?
Capsticks provides truly national full-service support to over 200 registered providers (RPs) across the country. Our Housing & Regeneration team, one of the largest in the country, advises on all types of development transactions from forward funded schemes, section 106 developments and stock rationalisations to plot sales and general asset management work. We are experts on all aspects of planning law including s106 agreements, CIL advice, planning appeals, Compulsory Purchase Orders and all general planning law matters.
If you have any queries around what's discussed in this insight, or the spending review itself, and the impact on your organisation, please speak to Chimi Shakohoxha, Suzanne Smith or any of your contacts at Capsticks to find out more about how we can help.