Autumn Budget 2024: housing sector reacts to confirmed policies, extra £1bn for remediation, and employer costs rise

Kate Henderson, chief executive at the National Housing Federation, welcomed the announcements on the AHP top-up, reviewing Right to Buy discounts and seeing “some progress” on funding for building safety work in social housing.

 

“[The] Budget demonstrates the government’s commitment to social housing, recognising it alongside the NHS and schools, as part of the vital infrastructure of our country,” she said.

  

“With the housing crisis affecting people in every part of the country, we support the government’s ambition to build 1.5 million new homes, but we can only achieve this with the right support. We look forward to a new long-term housing strategy announced at the next Spending Review, including a significant boost in funding for social housing.”

 

Gavin Smart, chief executive of the Chartered Institute of Housing, said it was “encouraging to see” the chancellor using her first Budget to acknowledge the importance of housing as part of the government’s drive to ‘fixing the foundations’, with financial support and revision of fiscal rules to underpin it.

 

“The focus on creating new affordable social homes, alongside measures to improve and protect existing ones through Right to Buy reforms and increased rent stability, which we’ve long called for, represents a positive step towards tackling our broken housing system,” he added.

 

“We share the government’s vision of a fairer housing system that can empower people with safe, affordable and quality homes, and look forward to working together to contribute to its housing strategy alongside responding to the consultations launched today.”

 

Fiona Fletcher-Smith, chair of the G15 and chief executive of L&Q, said there is much to appreciate in this Budget, especially the £500m pledge to the AHP.

 

She added: “We are also pleased with the government’s promise to support the remediation of social homes to remove dangerous cladding, which was previously mostly available to private landlords.

 

“However, the introduction of a five-year rent settlement for social housing providers at CPI [Consumer Price Index] plus one per cent falls short of what is urgently needed.

 

“Not-for-profit housing associations require a minimum 10-year settlement to help ensure the long-term stability and confidence necessary to meet the government’s ambitious target of delivering 1.5 million homes during this parliament.

 

“We look forward to setting out more detail on this in the forthcoming consultation on a long-term rent settlement.”

 

Ian McDermott, chief executive of Peabody, said the measures announced are “a step in the right direction”.

 

He added that the consultation on longer-term rent certainty for councils and not-for-profit housing associations is “particularly welcome” and the additional public investment to help fund social homes is “a positive signal of intent”.

Mr McDermott said he was also pleased to see help for people on low wages, as well as support for local council partners.

 

“For as long as I can remember, social and supported housing has been treated as a cost by governments,” he said.

 

“Looking ahead to the Spending Review next year, it’s time for that to change. It’s time for social housing to be recognised as vital infrastructure for the country; an investment in the future, a way to secure significant social and economic benefits, and essential for inclusive growth. [The] Budget is a decent start, but there is much work ahead to tackle the housing emergency.”

 

Mark Washer, group chief executive of Sovereign Network Group, said that plans to agree a long-term rent settlement are “very welcome”.

  

He added: “This is a firm indication that the government is serious about addressing the national housing crisis by giving housing providers the certainty they need to build more new homes and invest in existing homes.

 

“We also welcome the decision to invest in planning officers and in the remediation of dangerous cladding.”

 

John Greaves, chief impact officer at Places for People, welcomed the £500m top-up to the AHP as a “vital boost” and said the consultation on a five-year rent settlement gives the landlord “the prolonged financial certainty we have craved”.

 

“Labour’s first Budget in 14 years is a welcome first step, but the real journey starts now,” he said.

 

“Government must urgently work with the right partners to go further and faster in driving the positive societal change it promises.”

 

Melanie Leech, chief executive of the British Property Federation, said: “Measures to support the delivery of more homes are welcome, but the chancellor knows that much more is needed if the government is to deliver on its 1.5 million homes pledge.

 

“The promised housing strategy needs to be much bolder and go much further. This includes unlocking the billions of pounds of investment into the build-to-rent sector, so it is particularly disappointing that Rachel Reeves did not take the opportunity to reverse the previous government’s decision to abolish multiple dwellings relief announced in spring.”

 

Rise in staff costs

 

Lee Bloomfield, chief executive of Manningham Housing Association, said the promised five-year social housing rent settlement will offer “a degree of much-needed financial stability” for housing associations.

 

However, he said that the rise in employer National Insurance contributions will “not only add to the costs faced by housing associations, it will also impact on all other elements of the supply chain which will be expected to deliver the many new homes so desperately required”.  

 

Ms Reeves unveiled the change to employer National Insurance contributions during the Budget, with the rate raising from 13.8% to 15%, as well as reducing the per-employee threshold at which employers become liable to pay National Insurance £5,000 from 6 April 2025.

 

The policy changes are among £40bn of tax rises by the chancellor as part of a Budget intended to shore up public finances and provide economic stability through a new fiscal framework. 

 

“I sincerely hope that the chancellor has not made a decision she will come to regret,” Mr Bloomfield added. 

 

Adam Cutler, social housing tax lead at Crowe, said the increase in employer National Insurance contributions will be “particularly concerning” for housing associations. 

 

“Despite all the innovations of recent years, the development, maintenance and management of housing remains a labour-intensive activity,” he said.

 

“Organisations will see their own staff costs rise as a result, and no doubt the repairs contractors and house builders they work with will be seeking to pass most of this increased cost on to their customers.”

 

Elizabeth Froude, chief executive of Platform Housing Group, also expressed concern at the rise in the employer rate. 

 

She said: “While we understand the chancellor’s need to balance the budget, the increase in employment costs will put further financial pressures on the sector in a period where our income will increase very little next year, with much to be absorbed in terms of increasing regulatory and legislative obligations, and will undoubtedly impact on our ability to recruit additional colleagues to support these areas.”

 

Hear key takeaways from the Budget from expert economists Paul Johnson, director of the Institute for Fiscal Studies, and Yael Selfin, vice-chair and chief economist at KPMG, at the Social Housing Annual Conference on 30 November in London, in a programme chaired by Newsnight’s political editor Nick Watt.

 

Other expert speakers at the event include Florence Eshalomi MP, chair of the Housing, Communities and Local Government Committee; Bernadette Conroy, chair of the Regulator of Social Housing; and Shahi Islam, director of affordable housing at Homes England.

 

For more information, and to book while spaces remain, click here.