The revival of mortgage guarantees makes sense in a world where mortgage rates for FTBs have ballooned compared to other mortgagors, threatening a further fall in home ownership. The policy is unlikely to have a significant effect on house prices.
Mortgage Rates by LTV, 2018-2021
Freezing housing benefits comes at a moment when rent arrears statistics are staggering. If the freeze persists until 2024 we expect it to take around £1,000 per year off claimants over a period when many will still be looking for work. To make matters worse it’s doubtful that the exchequer will see the savings he hopes for.
Christina Palmou Economist
Annual gap between housing costs and housing benefit for a two-bedroom house at the 30th percentile
Keeping fuel duty down avoids a short-term political problem – but the Chancellor was silent on the strategic challenge of falling fuel duty revenues as we deploy electric vehicles. Without clarity on our strategy, we face a £30 billion hole in the public finances, more congestion, and increased inequality as motoring becomes much cheaper for those who can afford electric vehicles.
Car-equivalent reduction per year -RPI indexation vs freeze
Delivering net zero will require us to ramp up to £50 billion of investment per year, and offers the prospect of millions of green jobs – but the measures set out today don’t get us close to those ambitions. While there are some positive proposals in the Budget, the reality on net zero doesn’t yet match the rhetoric. Time is running short for the UK to demonstrate its credibility ahead of COP26
Heat pump installations - Budget 2021
While an infrastructure bank was long-overdue, it is baffling why the Government has chosen to give it only a fraction of the funding recommended by the National Infrastructure Commission. The Chancellor’s lack of ambition means the Infrastructure Bank could struggle to attract the private-sector investment needed to address the scale of our net-zero and levelling up challenges.