UK Spring Budget and Construction: Chancellor’s 4 E’s miss the ‘H’ of Housing

The lack of affordable housing is as big an issue for the economy. 

Unfortunately, the four “E’s” do not deal with one of the key issues facing the economy, namely the lack of housing, particularly affordable housing. 

Housing is basic human necessity and wherever you look there is a shortage. The growing number of homeless people, the frenzy when accommodation is made available for renting and the increasing cost of renting all bear this out. 

For housing, there is a big disconnect between the what the sector needs and government policy. 

All the major house builders are publicly saying they will build fewer houses this year than last year. What we needed from the Chancellor Spring Budget was a stimulus for the housing market. Unless our housing stock increases significantly, the problem will only get worse. Stamp duty reductions and tax relief on mortgage interest for first time buyers would have really helped but the budget did not address these issues at all. 

In addition, the government wants to see an improvement in the quality of housing stock. However, it is not doing anything to help with supply and the enforcement of Minimum Energy Efficiency Standards (MEES) which could mean that some housing becomes unlettable. The lack of incentives for retrofitting such as VAT exemptions and grants and financial support such as soft loans is hard to understand.  

Construction, like many sectors, is struggling to find the staff it needs so hopefully the proposals to increase employment and help the economically inactive back to work will bear fruit. 

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