Things we’d like to see in the budget Episode 5 – Tackling Job Security

Dear Rachel,

In this, my final pre-budget letter, I urge you to consider Demand.

Like it or loathe it, the UK’s housing market works on a Supply and Demand basis.

If no-one feels they can afford it, no-one will buy it.

We’ve already talked about the difficulties facing the social and affordable housing sector in funding new build programmes.

Today’s letter is about those who want to buy their first home, move up the ladder or downsize.

These are the ordinary, working people on whom the private housebuilding sector – and its supply chain, employing hundreds of thousands of people – depend. For context (source: Home Builders Federation):

• Each new home built supports around 3.4 jobs across the supply chain.
• Around 90% of expenditure on building supplies and materials stays in the UK economy.
• Every £1 spent on construction output, generates an estimated total of £2.41 to £2.84 in total economic output (GDP increase).
• Every new home built generates large tax receipts for the Exchequer and local authorities through Stamp Duty, Corporation Tax, PAYE, National Insurance and Council Tax.
• New developments involve significant financial contributions, known as Section 106 and Community Infrastructure Levy (CIL) contributions, which fund local infrastructure.
• Residents of new homes typically spend an average of £7,000 on furniture and decorations when moving in.

But in an economy where people are scared of losing their jobs as unemployment has just hit 5% and food price inflation is running at 4.9%, where the tax burden on businesses and individuals is high and growing, where there are no first time buyer support programmes and where anyone already living in a house in council tax band F and above is threatened with a mansion tax, answer me this:

Why would anyone buy a new home?

Achieving your Government’s housebuilding targets – and generating the growth that this activity drives – depends on positive economic conditions for working people.

Remember this when you rehearse your budget statement tonight. Do any of the measures you are proposing support the conditions that will make the hardworking great British public feel safe enough to start looking at Rightmove?

We hope so.

James Scott
MD