Chancellor announces several funding measures designed to help social housing sector, including VAT relief on land sold to social landlords
John Healey has announced several funding measures designed to help the social housing sector, including extra funds for its flagship Social and Affordable Homes Programme.
The chancellor, in his first Budget today, confirmed an extra £1.5bn for the 10-year SAHP, taking its total funding to £40bn.
The Budget documents said the new funding will complement the £9.6bn allocated earlier this year and support the delivery of 10,000 extra homes.
Healey also announced the government is extending cheaper borrowing for councils for housebuilding.
It is extending the preferential Public Works Loan Board borrowing rate - at 40 basis points below the PWLB normal rate - for a further year and will keep it under review.
It will extend the total amount of loans that can be issued from the PWLB from £135bn to £155bn, with a further option to increase this to £175bn.
Healey also announced a new VAT relief on land sold to registered social housing providers to expedite the construction of social housing.
As previously trailed, the Budget also confirmed an extra £432m to tackle rough sleeping.
The Treasury said: “The £432m invested at this Budget will provide individual relief while also reducing the significant fiscal cost of each individual sleeping rough, estimated at around £14,000 per year.”
The Budget also confirmed the government is progressing its revising of the Green Book – the guidance used by the Treasury to assess projects - to develop place-based business cases which will mean housing projects can be considered together with other types of development.
The government is supporting the roll out of “good growth funds” across England, which are intended to enable local leaders to bring together different funds into a single investment approach. It confirmed a bespoke borrowing facility of £1.5bn for mayors to support this.
Healey also announced a ‘roadmap for fiscal devolution’ with 20% of business rates being retained by mayors from next year and 100% being retained locally by the end of the decade.
At-a-glance: Budget housing measures
- Reforms to ‘green book’ used by Treasury to assess business case for investing in projects - new guidance on developing place-based business cases which will mean housing projects can be considered together with other types of development
- Extra £1.5bn for the Social and Affordable Homes Programme
- New £4.7bn Your First Home equity loan scheme aimed at supporting 70,000 first-time buyers with up to 20% government equity loans
- Removal of BNG requirements on brownfield land up to 1.5 hectares
- Cheaper borrowing for councils for housing by extending the preferential Public Works Loan Board rate for a further year, to 2027-28, at 40 basis points below the PWLB normal rate
- Zero-rate of VAT for land sold to registered providers of social housing
- Flexible funding to invest in local authorities, boosted by £1.5bn of devolved loans for mayoral authorities - will back transport and regeneration projects
- Roadmap for fiscal devolution - 100% of business rates will be retained by end of the decade
- £100m local apprenticeship service funded from savings in welfare fraud and error
- White paper and legislation next year on reforming welfare system following Milburn report
- Further £430m for rough sleeping
- No changes to building regulations for the rest of parliament, except building safety
- The government will introduce a new First Time Buyer ISA from April 2029
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