Spring Budget 2024 | Main announcements, industry reaction
A trailblazer devolution deal for the North East, a £450m investment in a Liverpool vaccine manufacturing hub, and regeneration funding for various North West, North East and North Wales towns featured among chancellor Jeremy Hunt’s announcements.
He began the Spring Budget announcement with a look at the economy, telling Parliament: “Of course, interest rates remain high as we bring down inflation.
“But because of the progress we’ve made, because we are delivering the Prime Minister’s economic priorities, we can now help families not just with temporary cost of living support, but with permanent cuts in taxation.”
He added: “When the Prime Minister and I came into office, it was 11%. But the latest figures show it is now 4% – more than meeting our pledge to halve it last year.
“And today’s forecasts from the OBR show it falling below the 2% target in just a few months’ time – nearly a whole year earlier than forecast in the Autumn Statement.”
While cutting taxes and keeping inflation down was the main theme, here are the key takeaways from his speech for those involved in the Northern property scene.
Job creation outside the South
Since the government’s levelling up agenda began five years ago, two thirds of new jobs have been created outside of London and the South East according to the chancellor.
North East trailblazer deal
This is estimated by the government to be potentially worth more than £100m and provides the incoming North East Mayoral Combined Authority more funding streams and powers on how that money is spent. Read more about the deal.
2p cut to National Insurance
This will take effect from April, a further reduction from 10% to eight %.
An employee with an average annual salary of £35,400 will receive a tax cut of more than £900 compared to last year, according to government figures.
Community regeneration
As the levelling up agenda continues, it was confirmed that £20m each has been put aside for regeneration projects in Runcorn, Rawtenstall, Newton-le-Willows, Darlington, and Rhyl across the next decade.
Village halls
The chancellor confirmed £5m has been allocated for communities to renovate their village halls.
Housebuilding
A drive to build more houses for young people was referenced by the chancellor who said the government is on track to deliver more than 1m homes in this parliament.
He also made reference to levelling up secretary Michael Gove’s announcement last week of £188m to support projects in Sheffield, Blackpool, and Liverpool.
A new £20m community-led housing scheme to deliver developments is also being launched.
North Wales investments
Two of the more attention-grabbing announcements concerned North Wales.
The government has reached agreement on a £160m deal with Hitachi to purchase the Wylfa site in Ynys Môn, and the Oldbury site in South Gloucestershire.
Hunt was keen to stress Ynys Môn has a vital role in delivering nuclear power.
The government will also help fund the ongoing renovation of Theatr Clywd in Mold.
Liverpool vaccine hub
An eye-catching £45m has been earmarked to fund medical research to develop new medicines for diseases like cancer, dementia, and epilepsy.
The UK’s ability to manufacture these medicines will be boosted by plans for a £450 million AstraZeneca investment to build a new vaccine manufacturing hub in Speke. Cambridge, where Astra Zeneca is also looking to expand, will benefit as well from government support for the life sciences sector.
Multiple dwellings relief
This will be abolished from June which the government says will raise £385m a year. The Furnished Holiday Lettings tax regime will also be scrapped from April 2025, in a move the government claims will save £245m a year and make it easier for people to purchase homes in their local community. There are no changes to stamp duty.
Property capital gains tax
This will be reduced the with chancellor cutting the tax from 28 % to 24 %.
Read the full Spring Budget document.
Industry reactions
Comments have been edited for clarity and brevity
‘The industry wants change’
Thomas Pearson, head of real estate commercial, and Neil Armstrong, head of construction at JMW
“There’s little doubt that the abolition of multiple dwellings relief for stamp duty land tax is unlikely to be well received by property investors and developers, and they will now have to be alive to how they structure portfolio deals going forward. We’d also argue more could have been done to support the struggling food and beverage sector, possibly by way of VAT cuts; as a significant occupier of property this would have had a direct impact on the stability of the commercial and investment property sector.”
‘Nothing on net zero’
Jeremy Hinds, director, Savills
“I didn’t hear of any devolution extension deals for Manchester.
“The trailblazer for the North East is presumably modelled on that announced last year for West Midlands and Greater Manchester. If that’s true, perhaps trailblazer is an overused term!
“Investment in North Wales is an interesting move, so too the promotion of nuclear, but as yet no comment on net zero and need for green infrastructure investment. The UK construction industry needs a framework to help meet net zero targets.
“I think it’s fair to say this is an election budget, and ideas and proposals that don’t meet the need for electoral gain are now not on the agenda. That means net zero framework proposals to encourage green investment are on hold.”
‘Help young people onto the housing ladder’
Sean Keyes, chief executive of Sutcliffe
“The Government will have to work their magic for what will surely be the last major fiscal event before the next general election if we are going to see growth in the economy.
“With approximately 210,000 new homes built across the UK last year, with a requirement for 300,000 I know that help for first-time buyers will be welcomed by young people, making it easier for them to get on the housing ladder, however, reducing the upfront cost of purchasing a property doesn’t solve the issue of needing to build more sustainable homes.
“Young people are the start of the housing chain and so I hope the Chancellor delivers on his commitment to build houses for more young people.
“As was missing in the autumn budget, I would have liked to have seen more tax breaks for SMEs as they are the backbone of the UK economy, accounting for 99.9% of all businesses.
“I hope that whoever is in power in the next six months introduces more favourable corporation tax rates or rewards businesses for taking on school leavers, something I am a strong believer in and think this would encourage more companies to invest in the next generation.
“If we can also increase public spending on housing, healthcare and education, without increasing taxation, by growing the economy, then it will boost the economy and the private sector will follow immediately. I do welcome, however, an increase in levelling up funding which is being invested in the Liverpool City Region and beyond, but this needs to be action and not words this time around.”
‘Increase public spending on housing sector’
Neil Baines, managing director of Steven Hunt Associates
“Whilst it remains to be seen if this is going to be the final budget for the current government, the real issues that concern engineering and construction are how we’re going to achieve net zero, how we’re going to rebuild our failing hospitals and schools and how we’re going to hit targets for new housing.
“I would have liked to have seen more clarity given to those challenges and how we can encourage businesses to prioritise sustainability.
“It’s my belief that if we increase public spending on projects in the education, healthcare and housing sectors, then private sector partners would echo this commitment and things could change quickly and to the benefit of the general public.”
‘Lack of focus on sustainability’
Dave Dargan, co-founder and chief executive of Starship
“In Jeremy Hunt’s spring budget, there was a pronounced lack of focus on sustainability and how the UK plans to achieve net zero.
“Notably, I would have liked to have seen a substantial allocation for promoting more modern methods of construction, reflecting the need for more sustainable housing across the country, especially as the housing crisis worsens.
“While support for first-time buyers has been largely welcomed, it’s also important to remember that in order to get on the property ladder, there needs to be houses to purchase.
“I believe that if the Government was to prioritise modular housing and support the acceleration of its delivery, it would go a long way towards fixing our broken housing system.
“By investing in more green construction methods, the budget underscores the need for a forward-thinking government who will support the construction industry, drive the country forward and promote resilience, but also sustainability.”
‘Council’s need funding to stabilise’
Cllr John Merry, chair of Key Cities and deputy mayor of Salford
“Year-on-year funding for local authorities across our key cities has fallen despite growing demand for their services. Disappointingly, the government is once again enforcing budget cuts rather than addressing the root causes of the financial crisis that so many councils are facing.
“The requirement to provide adult social care has placed intolerable pressure on local authorities, who have been the last wall of defence protecting many households from destitution. Today, some local authorities are spending half of their council tax revenue on temporary accommodation for those facing homelessness.
“£4bn needs to be immediately distributed to stabilise councils up and down the country. Key Cities will continue to urge the government to increase funding in real-terms and undertake a major rethink of the relationship between central and local Government, not budget cuts and political point scoring.”
‘Budget’s are stretched’
Anja Beriro, partner in Browne Jacobson’s government and infrastructure team
“It is widely recognised that local government budgets are already incredibly stretched, with a wide variety of pressures resulting in several councils filing Section 114 notices in recent months and others at significant risk.
“We’re reaching a crunch point where, unless the overarching position changes and funding is made available from somewhere, a lot of critical services will begin to topple.
“For local authorities, while the long-term plan will involve a thorough assessment of how to make productivity gains in line with the Government’s vision, in the short term they must explore where further savings can be made with the least possible impact to their statutory duties.
“Throughout this process, it’s crucial that local authorities don’t rush into any decisions that will have a profound impact on their communities for years to come without considering all the potential consequences that may not be immediately apparent.”
‘Business confidence an issue’
“Business confidence is a real issue across every sector and what we are desperate for is a reduction in the harm economic headwinds have done to businesses and their ability to invest.
“There is some good news for some sectors in this budget but on the whole the lack of support for some of those calling for the most amount of support is glaring in its omission.
“Investment in the city’s life sciences is good news as this benefits all aspects of the city, especially in terms of attracting those who want to do business in Liverpool. Growth attracts supply chains, and those who want to work and invest in particular specialisms.
It is worth saying that it is what isn’t here rather than what is which causes concern. Business Rates Relief ends soons and there is no change in VAT for businesses over that £90k threshold. It does make you fear for our high streets because you worry more closures are to come.
“For our retail and leisure industries, consumer confidence is all important. People need to feel they have money in their pockets to spend on the high street. Is there enough here to make them feel they can treat themselves and their family, going out for dinner or a show?
“Will that cut in National Insurance, balanced alongside the other household bills that are increasing, make people feel they have more to spend?”
‘Budget falls short on housing’
Michael Allison, commercial director at Roma Finance
“One of the biggest challenges facing the UK at the moment is a chronic undersupply of quality homes, and unfortunately today’s Spring Budget falls short in terms of the support required by private landlords to make property management financially viable, and for first time buyers in securing a foot on the property ladder.
“As a result, many of our customers in the rental market will continue to be hampered in their efforts to monetise investment properties and for small to medium sized housebuilders to attract those young property investors desperate to have a place to call home.
“Having said that, the promise of a £20m fund for community led housing schemes is welcome and could provide an opportunity for social landlords and housing groups to regenerate deprived areas and release much needed affordable housing to the market.”
‘Where is the public transport funding?’
Angela Mansell, managing director at Mansell Building Solutions
“It’s a non-budget with little in it to stimulate the economy or property and construction in the North.
“It’s time for an early election as Starmer has called for. Let the country have their say and the electorate will regenerate the economy itself.”
‘Devolution announcement is welcome’
Clare Hayward, interim chair of the NP11
“Devolution is critical to giving local places the tools they need to fire up their local economies and meet local people’s aspirations, so it’s great to see new or enhanced devolution deals confirmed today for several parts of the North, following announcements by Michael Gove at last week’s Convention of the North.
“Although the North is leading the way on devolution, there are still parts of our region without devolution deals and we urge the government to ensure that those places can realise their full potential, both for the people who live, and work, in those areas, and for the country at large.
“It is only by enabling all parts of the country to punch their full economic weight that we will deliver the ambitious national growth that both the Conservative and Labour parties have committed to.
“Many of the announcements today around investment and sector support are welcome. What is crucial is that these are delivered in a joined-up way that encourages coordination rather than competition.
“Partnership-working across the North will be crucial to this, so we want to see government working with us to collaborate on those opportunities that are best addressed at the pan-northern level, such as trade and investment, innovation and the opportunity to lead the net zero transition for the whole country.”
‘Tax on holiday lets could stimulate property market’
Phil Cooper, director at Hope Architects
“It’s not a particularly exciting budget for the property sector, with the main change being the reduction in Capital Gains Tax on property, which may help buy to rent investors and stimulate homes returning to the owner-occupier market.
“However, of interest to parts of the North is the change to tax relief on holiday lets. This is great news for villages across the north where local residents are priced out of the market when competing against holiday lets, and results in empty villages and social stagnation.
“While this is good news for the housing crisis in general, it won’t result in a fast change, and it remains to be seen if further changes come after the general election, whenever that may be!”
‘Delighted to see commitment to nuclear sector in the region’
Danny Hope, regional director at Hydrock
“Against challenging economic headwinds, there are a couple of bright spots for some sectors in our region which caught our eye — confirmation of Astra Zeneca’s investment in the life sciences sector in Liverpool is good news as this benefits all aspects of the city, especially in terms of attracting those who want to do business in that part of the region.
“Alongside an increase in levelling up funding, this should fuel what already feels like a market gathering pace once again.
“We were also delighted to see further commitment to the nuclear sector in our region with the purchase of the Wylfa facility. Based on our knowledge of working in the sector, the site is more than suitable for both a big nuclear development and a number of SMRs which could play a major role in decarbonising the power sector in the UK and establishing long-term resilience.”
‘Devolution positive, but council funding inadequate’
Andy Burnham, Mayor of Greater Manchester
“The chancellor deserves some credit for extending the household support fund in today’s budget.
“There were also further positive announcements on devolution, with a trailblazer deal for the North East and steps towards devolution in regions in the South.
“Earlier this week the chancellor criticised councils for spending too much on consultants, but today’s budget offered more of the same begging-bowl culture that forces councils to bid for small pots of funding. Facilities people use every day are crumbling and councils are being forced to sell off assets, but the best the government can offer is a £5m pot, controlled by Whitehall, for renovating village halls.
“This government has made progress on English devolution but it cannot ignore the chronic underfunding of local authorities in our regions. Devolution needs to be built on solid foundations – not undermined by inadequate funding of local government.”
‘North East trailblazer deal is to be welcomed’
Keith Hardman, head of Cushman & Wakefield’s Leeds office and national head of UK Development & Strategic Advisory at C&W
“The budget was never likely to unveil any showstoppers, even in this election year since the scale of the fiscal challenge gives limited room for manoeuvre. If only to highlight, of the £1.23 trillion of government total managed expenditure for 2024/25, debt interest accounts for £109 billion (circa 9%), which is £10b more than the projected spend on housing and environment, and transport combined for the same year.
“That said, there were some welcome news for the north with a new trailblazer devolution deal with the North East mayoral combined authority, which is to provide a package of new funding potentially worth over £100 million, including a new growth zone.
“This follows the recently announced deeper devolution deals with West Yorkshire, Liverpool city region, and South Yorkshire combined authorities. These sit alongside a further £400m for investments in support of the long-term plan for towns which extends to 20 more places, and injects over £30 million into capital and regeneration projects across the UK.
“The Office for Investment is launching a pilot programme working with departments to explore the creation of new government asset-backed investment opportunities, where this represents good value for money for the taxpayer.
“Government refers to the potential to improve the usage of underutilised government assets and inject new funding into dormant assets across the country. It will be interesting to see what this means in practice, and for example whether this might involve ‘wrapper leases’.”
‘Little to accelerate housing delivery’
David Smith-Milne, chief executive at Place Capital Group
“Yesterday’s budget – unsurprisingly – announced support for a number of London housing projects that, whilst delivering significant numbers of new homes in the capital, will do very little to unlock the crisis in the capital’s affordable housing.
