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Published 27 October 2021
The Chancellor promised that today’s belated Budget wouldn’t include any ‘fire-works’ (despite heavy criticism about the release of detailed pre-briefings to the press!) but there was plenty to capture the attention of the residential development industry under the key themes of Building Back and Levelling Up our ‘uneven economic geography’.
In the context of global inflationary pressure and the highest level of public borrowing since the Second World War the Treasury has nevertheless shown firm support for housing and economic infrastructure delivery.
A new 4% tax on profits over an annual allowance of £25m to run for 10 years from April 2022 - a company or group will be taxed under RPDT for an accounting period where it undertakes UK residential property development activities (which includes new build and conversion).
The Treasury is allocating £1.8bn for building around 160,000 new homes on brownfield sites in England – providing the financial backbone behind Michael Gove’s brownfield-first levelling-up planning agenda. Not only will the funding help to generate housing numbers on derelict and disused sites but ‘greener’ housing to help meet our 2050 Net Zero commitments.
Earlier this month the Department for Levelling Up, Housing and Communities announced £58 million of funding from its separate £75 million Brownfield Land Release Fund (BLRF) for 53 councils to support development on brownfield sites.
The Treasury’s further support for regional brownfield regeneration comes at a time when the DLUHC has also hit ‘pause’ on policies for greenfield development as part of wider planning reforms.
The Chancellor has confirmed £11.5 billion for the Affordable Homes Programme (20% more than the previous programme) – this is the largest investment in a decade and is designed to help build up to a further 180,000 affordable homes from 2021-22 onwards.
First announced in the Government’s Planning White Paper (when we called it planning Ex Machina), £65 million of investment will now be made available to support the digital transformation of the planning system.
Given the power of the digital landscape and AI in our everyday lives this transformation seems well overdue – but to take the ‘big, bold steps’ the Prime Minister desired for this transformation at the consultation stage the new system should aspire to delivering much more than simply procedural efficiency; and we hope that it will harness the full potential of UK PropTech to deliver a more artificially intelligent approach to policy-making and decision-taking- such is the importance of planning to housing delivery.
England's cities and regions will receive £6.9bn to spend on train, tram, bus and cycle projects - which includes £1.07bn for Greater Manchester, £1.05bn for the West Midlands and £830m for West Yorkshire. £2.6bn will also be made available for local road network maintenance and upgrades.
The Chancellor has also announced a new £9 million "Levelling Up Parks Fund" for councils to transform over 100 neglected urban spaces into 'pocket parks'.
The new green infrastructure bank will also open its doors on Monday to drive £40bn of investment.
The housing-enabling effects of these initiatives should be welcomed.
If you would like to discuss how any of the above issues could affect your business or project please contact:
London - Walbrook
+44 (0)20 7894 6193
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