Budget October 2021
Everything homeowners need to know from tax changes, cladding funding, spending on new housing, reforms to planning - and what's not included - from the Autumn Budget 2021
We already knew that higher taxes were planned for next year as the government finds ways of paying for the costs of the pandemic. But apart from that, there isn’t a lot to report from this autumn Budget 2021.
The Chancellor confirmed his announcement last month that national insurance contributions will increase by 1.25% from April next year to pay for the NHS and social care reforms.
Most people will pay national insurance at a rate of 13.25%, on top of income tax of 20% for basic rate taxpayers, which means most people will pay tax at a rate of 33.25%. But reforms to social care from 2023 should mean less people have to sell their home for care.
The Chancellor “confirmed” a settlement of nearly £24 billion to “unlock” over 1 million new homes. This includes funding to unlock brownfield sites for housing, to regenerate underused land, and deliver affordable homes. Planning An additional £65 million investment was announced to improve the planning regime through a new digital system which it is claimed will ensure more certainty and better outcomes for the environment, growth and quality of design. This is good news if it helps to speed up our antiquated planning system to deliver quality new homes in the right places and for homeowners wanting to improve their homes. Cladding tax
Property developers will be charged an extra levy to raise a £5 billion fund to help remove unsafe cladding from high-rise buildings. Companies with profits over £25 million will be charged at a rate of 4%.
We fully support developers paying up but the government has missed the opportunity yet again to have a comprehensive strategy to tackle the cladding crisis. Commenting on the announcement, our CEO Paula Higgins said, “We need to help those urgently trapped in unsafe and unsaleable flats now. The Building Safety Fund is too limited in scope – homeowners in medium-rise buildings continue to face huge bills and there is no help to address other safety issues – such as missing fire breaks. For these people, their life is on hold. They can’t sleep soundly at night, sell up or move on.” “There needs to be a cast iron obligation on developers to bring the homes they built up to standard. And to avoid similar situations in the future; developers should be held responsible for selling properties that do not fully meet all building regulations by fining them heavily as well as requiring them to buy back any sub-standard properties. ”
What’s been missed?
There were no announcements in this Budget on reforms to stamp duty or capital gains tax. And despite news this month of £5000 grants to replace gas boilers and proposals for green mortgages, the environment didn’t feature. We were also disappointed that the government failed to offer additional help to poorer families faced with higher energy bills this winter.