Reacting to Rachel Reeves’ Spring Statement, James Dickens, managing director of Birmingham-based regeneration specialist Wavensmere Homes, said: “The economic cost of Reeves’ increases to National Insurance, Living Wage, and Stamp Duty will lead to hospitality operators going out of business, be felt by the pockets of all those looking to move onto or up the property ladder, and by the housebuilders vying to deliver energy-efficient new homes.
“Next week’s rises will be a bruising hit to all businesses that are heavily reliant on labour. Unless something is done to support hospitality, the decimation of that industry is very very real. We are dealing with multiple quality operators across a number of city centre schemes where they are the bedrock of the placemaking we are trying to create. These venues are unable to move forward without some positive intervention and clarity of where their operational costs are going to end up.
“Germany has adopted a reduced VAT equivalent of 7% for hospitality. A similar policy should be considered for the UK to support these fragile operators that have suffered time and time again since Covid lockdowns began five years ago. For those venues that do survive, the inevitable price rises to enable business sustainability will have a knock-on effect on inflation.
“The OBR has further downgraded the 2025/6 forecast for GDP growth to 1%, while the inflation forecast has been revised from 2.6% to 3.2%. If CPI inflation doesn’t drop to a 2% average until 2029, then the era of ultralow interest rates is a thing of the past.
“For property and construction, while the new NPPF and Planning and Infrastructure Bill both set out a positive policy reset, they don’t offer immediate cheer to offset today’s fiscal event. In the meantime, landlords and those hoping to move onto or up the housing ladder are braced for next week’s Stamp Duty increases and higher energy costs. Developers are also grappling with the Building Safety Regulator Gateway process, next year’s introduction of the Building Safety Levy, and the prospect of an additional Mayoral Community Infrastructure Levy for new developments within elected mayor boundaries.
“However, the extra £2bn in grant funding for the development of affordable housing is welcome. The £600m funding across four years to train up to 60,000 engineers, brick layers, and electricians is also helpful, but much more needs to be done to enable housebuilders and developers to bring commercially viable developments forward that can generate new construction jobs.
“Constructing 300,000 new homes per year remains a pipedream! The Chancellor and the Deputy Prime Minister should be finding ways to assist housebuilders with delivering the Future Homes Standard and Biodiversity Net Gain legislation, to counteract the cost burden being passed onto the consumer. The prospect of the market being able to absorb additional significant upfront taxes aligned to the construction of new homes is very ill-advised.
“Wavensmere Homes has grown year-on-year by defying industry challenges and constructing attainably priced houses and apartments in highly sustainable, popular urban locations. Our focus on construction deliverability will see the keys for hundreds of high EPC-rated new homes handed over to customers across the Midlands and Suffolk this year.
“Schemes like Belgrave Village in central Birmingham sit in distinct contrast to every other residential construction site on the horizon. The city skyline is awash with tower cranes for Build-To-Rent blocks. However, it’s actually family houses and a mix of different typologies that are in high demand, so that’s what we design and build.”
Wavensmere Homes is constructing seven major urban regeneration schemes, located in central Birmingham, Derbyshire, Cheltenham, Wolverhampton and Ipswich, and has further projects in the immediate pipeline. The Edgbaston-headquartered housebuilder has around 3,500 new homes either under construction or in planning.
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