In his first Autumn Statement, the Chancellor said the government would launch the biggest affordable house building programme seen since the 1970s.
While the Chancellor said homebuyers would continue to be supported by schemes such as the Help to Buy: equity loan scheme and the Help to Buy ISA, he has continued his focus on boosting supply rather than demand with initiatives aimed at spurring house builders into action.
To boost the availability of homes and halt the decline in housing affordability, Hammond will set aside £2.3bn by 2020-21 to deliver up to 100,000 new homes in areas of high demand.
The objective of the fund is to provide infrastructure targeted at unlocking new private house building in the areas where housing need is greatest. It will also examine options to ensure that other government transport funding better supports housing growth.
A further £1.4bn has been set aside to deliver 40,000 affordable home starts by 2020-21. It plans to relax restrictions on grant funding to allow providers to deliver a mix of homes for affordable rent and low cost ownership. Hammond said the aim is to meet the housing needs of people in different circumstances and at different stages of their lives.
Jane Forbes, PwC housing partner, said: “Housing supply remains a critical issue for the country. The Lyons Housing Commission only last week indicated that concern from the public over housing, ‘is the highest it has been for 40 years’ and there had been great expectation that today’s Autumn Statement would bring the necessary interventions from government to address the supply shortage.”
A large-scale regional pilot is set to be launched for Right to Buy housing association tenants. Over 3,000 tenants will be able to buy their own home with Right to Buy discounts under the pilot.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “It sounds to me as though the government is kicking Right to Buy into the long grass. It was a manifesto commitment to roll it out across the country but the government isn’t going to do that now because it is nervous about the cost.”
In October, the government announced that it would pilot accelerated construction on public sector land, backed by up to £2bn of funding. To meet this commitment, it will invest £1.7bn by 2020-21 to speed up house building on public sector land in England through partnerships with private sector developers.
Hammond said the government will publish a Housing White Paper, setting out a comprehensive package of reform to support the strategy, expected shortly.
As predicted, the Chancellor banned lettings agents from charging tenants fees. He said that because landlords employed agents, landlords should foot the bill.