Construction industry winners and losers in the 2019 budget
The recent budget announced by the chancellor, Philip Hammond, raised a number of points that are of importance to the construction industry. Some of these will have a positive influence, whereas others will put further pressure on businesses in this sector. Here we look at the key points of interest to the industry and discuss what effect they may have.
Infrastructure and housing
The government showed that it was committed to revising the National Infrastructure Pipeline and the National Infrastructure Delivery Plan, which will improve long-term confidence and shows the planned investment in infrastructure by the public and private sectors.
In the short term, however, net investment by the public sector is expected to drop between 2019/22 and 2022/25 as a proportion of the GDP; therefore, private sector investment will be vital to maintain the flow of work.
There were no big housing announcements made in the budget; however, the Lifetime ISA was introduced, which will eventually take over from the Help to Buy ISA launched at the end of last year.
The budget also included headline notes on planning reforms, which will include speeding up planning decisions, making land ownership more transparent and permission in principle. Planning problems are one of the main issues for SMEs looking to extend their business and these changes could be a massive benefit to companies that are now working with Tensile Fabric structures, such as https://www.spatialstructures.com/
Stamp duty changes
Changes that were confirmed to the stamp duty rates could also impact on the house building industry. An increase by three percentage points on stamp duty for additional properties comes into force on 1 April this year and this is expected to have a significant impact on the buy-to-let market, especially as large-scale investors will not now be exempt.
The number of investors buying properties has increased in the past few months ahead of the changes, pushing demand in February to its highest level in 12 years; however, we could now see lower levels of investment in the sector, which could be a risk for the build-to-rent market.
The budget did not really bring anything of true significance for the construction industry; on the other hand, there was nothing significant taken away and the sector is not hugely worse off than it was before. Nothing significant initially could be significant for the long term future of the construction industry as it relies on consistency with budgets.