22 Mar

Budget 2013

Budget 2013

Commenting on the Budget, and the announcements therein, NAEA Managing Director Mark Hayward said:

"Any news about attempts being made to improve the property market can only be a good thing"  

There were some key announcements relating to housing and I have summarised these below:

  • The introduction of a new housing scheme, Help to Buy, with two key elements, which will provide £3.5 billion of capital spending.
  •  The first part is an equity loan of 20% of a home's value will be offered to people looking to move up the housing ladder. This will only available to buyers of a newly built home and the home cannot be worth less than £600,000 pounds.
  • £130 billion of guarantees for lenders who offer mortgages to people with a deposit of between 5% and 20% on homes with a value of up to £600,000, from the start of 2014.
  • Doubling the existing Affordable Homes Guarantee programme, to support £15,000 more affordable homes by 2015.
  • Extending the Build to Rent fund to £1 billion to support the development of new homes.
  • Extend Right to Buy.
  • Publish "significantly reduced" planning guidance by Summer 2013, in line with Lord Taylor's recommendations.

Budget Measures

Osborne said this is a Budget for 'people who work hard and aspire to get on'. There are 'no easy answers'. The Government is 'fixing the country's economic problems'.  He said this was to be a Budget for people who aspire for an 'aspiration nation'. 


  • The Chancellor conceded that growth will be lower and debts will be higher
  •  Growth is forecasted is revised down to 0.6% in 2013, 1.8% in 2014 and 2.3% in 2015, 2.7% in 2016. So the growth forecast is halved for next year.
  • The deficit will be 7.4% in 2013 an increase on the forecasted 6.9%
  • Borrowing - this year the Government will borrow £114bn this year
  • The Government will not be able to meet its public sector net debt target conceding a delay to 2017-18 so the debt target will be missed by two years 

Monetary Policy

  • The Asset purchase facility will remain in place for the coming year
  • The Chancellor is considering extending the Funding for Lending Scheme
  • The Chancellor set out an updated remit for the Monetary Policy Committee. This reaffirms the inflation target of 2%. The new remit also includes enabling the MPC to set out the trade-offs that have been made to secure the inflation target and a change in the correspondence system between the MPC and Treasury on inflation. The Chancellor has also asked the MPC to review how 'intermediate thresholds might work in Britain'


  • £11.5bn of savings to be made in the Spending Review
  • Additional 2% cuts to most Whitehall departments over the next two years amounting to £2.5bn. The savings will go towards large-scale infrastructure projects
  • Public Sector pay increases are limited to 1% in 2015/16.
  • A new limit on Annual Managed Expenditure further details to be set out in the Spending Review in June.

Growth Measures

  • Boost to infrastructure spending by £3bn a year from 2015 / 16 to be funded by savings in the Spending Review
  • Responding to the Heseltine Review a single fund will be made available for local enterprise
  • Two major carbon capture and storage projects will be taken to the "next stage"
  • There will be new incentives for the low emission vehicle industry
  • Support for energy intensive industries will be extended beyond 2015
  • There will be a "generous" new tax regime for shale, to promote early investment.  New planning guidance will also be published to ensure that local communities benefit from shale exploration. 
  • Employee share ownership is to be extended and capital gains tax relief for sale of business to employees
    • A new "employment allowance" worth £2,000 for small businesses will begin in April 2014. The chancellor says he is removing a barrier to small businesses hiring staff.Up to £2,000 is to be cut from employer National Insurance Contributions
    • There will be the abolition of Stamp Duty on shares


  • From April 2015 the main rate of Corporation Tax is to be reduced to 20%
  • The bank levy rate will increase to 0.142%
  • There will be new measures to tackle tax avoidance with "one of the largest ever packages of tax avoidance and evasion measures presented at a Budget". The Government will also 'name and shame' companies that avoid tax
  • New subsidies for childcare for working parents have been announced. "New tax-free childcare vouchers for working families will be brought in with: 20% off the first £6,000 of the childcare costs for each child
  • The Chancellor will also bring forward the overhaul of the pension system, a new single tier payment worth about £144 a week, to 2016
  • Proposed social care reforms will also be brought forward by a year to 2016 with a slightly lower cap of £72,000 down from £75,000
  • The personal allowance will be raised to £10,000 in 2014.

Home Ownership

  • £3.5bn over the next three years for shared equity loans will be offered to anyone looking to move up the housing ladder for those with a 5% deposit though the 'Help to Buy' scheme.  This is available to all, not just first time buyers.
  • Equity loans will be made of up to 20% to cover deposits on new homes
  • A new mortgage guarantee to support lenders in offering mortgages for higher loan to value mortgages. These will be able to support £130bn of mortgages.


  • The fuel duty increase which was due to take place in September has been cancelled
  • Alcohol duties will increase with the exception of beer.  Beer duty will be cut by 1p.

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