The injection of £15.3bn of new financial support takes the total to at least £44bn, and will be used to create the financial incentives necessary to deliver 300,000 net additional homes a year on average by the mid-2020s. It will also be used to boost the supply of skills, resources and building land available, the chancellor said.
The specific investments announced include:
- £8bn of new financial guarantees to support private housebuilding and the purpose-built private rented sector
- £2.7bn to more than double the Housing Infrastructure Fund
- £1.1bn fund to unlock strategic sites, including new settlements and urban regeneration schemes
- £630m small sites fund to unstick the delivery of 40,000 homes
- £400m for estate regeneration
- £34m to develop construction skills across the country
- £28m in three new “Housing First” pilots in the West Midlands, Manchester and Liverpool in an effort to tackle homelessness
Successive government failure
In his Autumn Budget speech, Hammond noted that the number of 25- to 34-year-olds owning their own homes has dropped from 59% to 38% over the last 13 years.
“Put simply, successive governments over decades, have failed to build enough homes to deliver the home owning dream that this country has always been proud of,” he said.
In an effort to help young first-time buyers (FTBs), Hammond slashed stamp duties, but stressed that measures to boost demand also needed to be countered by similar increases in supply.
“If we don’t increase supply of land for new homes, more money will inflate prices, and make matters worse,” said Hammond.
To that end, local authorities will now have the power to charge a 100% council tax premium on empty properties.
It was also announced that New Town Development Corporations will be used to kickstart five new locally agreed garden towns in areas of demand pressure – and will be delivered through public-private partnerships.
Following from a National Infrastructure Commission report published last week, Hammond also made a commitment to building up to one million homes in the Cambridge-Milton Keynes-Oxford corridor by 2050. And as a “down-payment on this plan,” a housing deal with Oxfordshire has also been agreed to deliver 100,000 homes by 2031.
Not just money
However, the chancellor also stressed that financial measures alone will not be enough. He said: “Solving the housing challenge takes more than money, it takes planning reform.
“This is a complex challenge, there is no single magic bullet.”
He said that focus will be on making the best use of urban land – where people want to live and where most jobs are created – while continuing the protection of the green belt.
Moreover, Hammond said councils in high demand areas would permit more homes for local FTBs and affordable renters.
The chancellor also emphasised the crucial need for skills training: “If we don’t train the construction workers of tomorrow. We may generate planning permissions, but we will not turn them into homes.”
In addition, taking note of the “significant gap” between the number of planning permissions granted and the number of homes built, Hammond has established an urgent review to examine the gap between planning permissions and housing starts
“If it finds that vitally needed land is being withheld from the market for commercial, rather than technical reasons, we will intervene to change the incentives to ensure such land is brought forward for development,” he said.
An interim report will be delivered before the Spring Statement next year.
To encourage bringing in new players to the construction sector, Housing Revenue Account (HRA) caps for councils in high demand areas will be lifted to increase building activity.
“If we don’t do more to support the growth of the SME housebuilding sector, we will remain dependent on the major national housebuilders that dominate the industry,” said Hammond.
Furthermore, in order to provide developers with “encouragement and persuasion,” and to provide local authorities with help and support – the Homes and Communities Agency will expand to become “Homes England”, and will be responsible for bringing together money, expertise, and planning and compulsory purchase powers to facilitate the delivery of new homes.
“By choosing to build,” he continued, “we send a message to the next generation that getting on the housing ladder is not just a dream of your parents’ past, but a reality for your future.”
For all Mortgage Solutions’ Budget coverage on the first-time buyer stamp duty exemption and the boost for small business click on the links.
The government has also launched a fintech competition to make rent history count toward mortgage affordability, changes to rental benefits and the Chancellor’s speech in full.
An extension of Council Tax liabilities for unoccupied homes was announced and the Office for Budget Responsibility and Building Societies Association have criticised the stamp duty cut.
Meanwhile Mortgage Solutions has dug out a series of hidden measures and rounded-up the best of the coverage.