The chancellor has delivered her Spring Statement which said that the planning reforms implemented by the government will see housebuilding reach a “40-year high”.
Rachel Reeves said that the reforms had been considered by the Office for Budget Responsibility (OBR) which concluded that they would increase the level of real GDP by £15billion by 2030.
The OBR continued to say that the changes made would see 305,000 homes a year built by the end of the forecast period, which would deliver 1.3million homes over the next five years. Reeves said that this puts the government “within touching distance” of its housing target, but ultimately falling short of the 1.5million homes goal.
Other key headlines for the housing industry had previously been announced by the government ahead of the Spring Statement.
Reeves covered the £600million committed by the government to train up to 60,000 skilled construction workers with the aim of tackling the skills shortage in the sector. She also referenced the additional £2billion in funding for affordable homes which was announced yesterday (25/3).
Here’s how the Spring Statement was received across the industry:
James Dickens, managing director of Wavensmere Homes, said: “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, bricklayers, 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.”
Brian Comer, chairman of The Comer Homes Group, commented: “As expected, the Spring Statement focused on the government’s drastic measures to cut national spending, but we are in an industry that is often overlooked despite its potential to provide a much-needed shot in the arm for the Treasury. History proves that a healthy property market provides the building blocks for a strong economy, so I’m eager to see the government focus on their plans to build more homes and policies to help more people get their foot on the housing ladder.”
“We have been encouraged by the housing minister’s initiatives to free up and improve the planning system and were eager to see the chancellor support this in the Spring Statement. The planning process has become a costly and time-consuming exercise, often requiring appeals and adjustments that cause further delays and at times the complete abandonment of what could have been hugely viable and successful projects. The fewer homes we are able to produce on an annual basis the higher prices will become, so we need to be able to produce more homes to ease the pressure on current values. We hope that the chancellor and the wider government will give the industry the attention it needs because the societal, economic and political rewards on offer are great.”
Michael Cook, chief executive officer of Leaders Romans Group, said: “Given the challenge of making £15billion worth of cuts to public spending, today’s Spring Statement was never going deliver everything on the property industry’s wishlist. That said, two significant pieces of good news stand out amongst some otherwise depressing statistics. And this goes to show the faith that the government has in our sector to deliver much-needed growth.”
“The first is the £2billion top-up for the Affordable Homes Programme which will provide up to 18,000 new social and affordable homes. Since council housing effectively ceased four decades ago, the private rented sector has fulfilled an important role in preventing homelessness. Today, with demand for rental properties outpacing supply, it’s good to see the government helping to address this need. However, it seems a missed opportunity that the government rarely addresses social housing in its broadest sense – homes for sale as well as for rent. At very little cost to the taxpayer, the government could do much more to champion shared ownership as an affordable and practical way of addressing this country’s housing crisis and enable first-time buyers to get a foot on the housing ladder.”
“The £600million for construction training is also very welcome, but again, there is a cost-free solution to the skills shortage which has been overlooked and again it concerns communication. The various trades and professions that make up the construction sector deserve greater respect and recognition. The answer is two-fold: more vocational degree courses to equip people with the necessary skills for the construction and property sectors and a greater championing of the non-university route into these roles. This approach would deliver a saving to the exchequer and a boost for the development sector.”
“There is undoubtedly a long-overdue need for a comprehensive reassessment of Stamp Duty. Unfortunately, this may have to wait until a future spending review, but in the meantime, I would hope that the government sets about considering changes to what can be a very damaging tax – one that can cost the Treasury, rather than benefitting it, bearing in mind the unintended consequence of discouraging people to move up the property ladder.”
Karly Williams, MD at Croudace Homes, commented: “The government has demonstrated its commitment to delivering more homes with today’s announcement. However, affordability continues to be a significant challenge. It’s encouraging to see the government allocate £2billion to fund up to 18,000 additional affordable and social homes, aiming to start construction by March 2027. We are committed to continuing our growth and working with our housing association partners to help meet the government’s goal of delivering 1.5 million homes and get more people onto the housing ladder.”
Chris Harris, chief operating officer at Dandara, commented: “Labour’s pledge to deliver an estimated 1.3 million new homes over the next five years is both ambitious and welcome, but its success will depend on how quickly long-standing systemic issues are addressed. While the chancellor acknowledged the planning system’s slow pace and indicated that recent reforms are just the beginning, under-resourced local authorities and slow planning approvals remain significant barriers to development.”
“Without meaningful investment in planning departments and local infrastructure, the proposed delivery targets will fall short, and we will struggle to achieve the 40-year high in housebuilding outlined in today’s statement. Delivering on housing pledges early will be crucial to building trust with both the industry and the public.”
