Budget 2011: planning, construction and housing

Housing and construction

The Government will publish the UK’s long-term forward view of projects and programmes in autumn 2011 as part of the National Infrastructure Plan. The Government will also enable building contractors to respond more effectively to emerging market opportunities by publishing quarterly, from autumn 2011, a rolling two-year forward programme of infrastructure and construction projects where public funding has been agreed.

 

The affordable supply of new homes in the right places helps to create a dynamic economy and a ?exible labour force. Housing supply is constrained by the lack of viable land for development. As set out above, the Government is announcing reforms to the planning system which will increase the amount of land brought forward and improve incentives for local communities to support development.

 

Over the long term, increased macroeconomic and ?nancial stability will create a favourable environment for house-building. Stability in the labour market and the availability of mortgage ?nance will support sustainable demand for housing. The associated increase in certainty for the construction sector will aid the supply of new homes.

 

The Budget provides help for homeowners and new buyers, and supports the capacity of the house-building industry to ensure a more efficient housing market:

  • The Government will help homeowners facing dif?culties by extending for a further year temporary changes to the Support for Mortgage Interest (SMI) scheme. The 13-week waiting period and £200,000 limit on eligible mortgage capital will now remain in force for new working age SMI claimants until January 2013;
  • The Government will provide £250 million to support ?rst time buyers to purchase a new-build property. The FirstBuy programme  will  assist over 10,000 households with equity investments jointly funded with house-builders; and
  • The Government will strengthen demand for residential property by reforming the stamp duty land tax rules applied to bulk purchases. This will reduce a barrier to investment in residential property, promoting private rented housing supply.

 

The Government will announce the outcome of its review of the stamp duty land tax relief for first time buyers in autumn 2011.

 

The Government will make Real Estate Investment Trusts easier to set up and more accessible to investors. This will encourage investment in the private rented sector over the longer term.

 

Planning

The government's  intention is that converting commercial premises which are empty, eg shops or offices, into residential homes, will no longer need a change of use application.


 

Planning reform

The planning system has held back investment and created distortions in the way that businesses compete, deterring development and growth. To address this, the Government will:

  • introduce a new presumption in favour of sustainable development, so that the default answer to development is ‘yes’;
  • localise choice about the use of previously developed land, removing nationally imposed targets while retaining existing controls on greenbelt land;
  • pilot a land auction model, starting with public sector land;
  • introduce a number of measures to streamline the planning applications and related consents regimes removing bureaucracy from the system and speeding it up. This will include a 12 month guarantee for the processing of all planning applications, including any appeals;
  • ensure a fast-track planning process for major infrastructure applications through
  • the Major Infrastructure Planning system; and
  • consult on proposals to make it easier to convert commercial premises to residential.

 

To accelerate the release of public sector land to support homes and jobs,  Government will work with local authorities to expedite planning decisions for surplus military land and other public sites suitable for housing, also testing ’build now, pay later’ techniques to quicken delivery. Together with the new presumption in favour of sustainable development, these proposals will potentially allow the Ministry of Defence to realise up to £350 million of estate disposals and enable delivery of up to 20,000 new homes by 2014-15.

 

The full budget commentary can be downloaded by following this link: http://cdn.hm-treasury.gov.uk/2011budget_complete.pdf
 

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