Autumn Highlights: The Chancellor’s statement in brief

November 23, 2016 / Isla MacFarlane
Autumn Highlights: The Chancellor’s statement in brief

On housebuilding, the Autumn Statement revealed:

  • A new £1.4 billion fund to build 40,000 new affordable homes;
  • A £2.3 billion Housing Infrastructure Fund to support the construction of up to 100,000 new homes in high-demand areas;
  • Relaxed restrictions on how existing affordable housing funding can be used;
  • A taper to Universal Credit rates;
  • A regional roll out of the Voluntary Right to Buy scheme.

Perhaps the most encouraging takeaway from today’s Autumn Statement, other than the fact Chancellor Phillip Hammond promised there will never be another one, are hints that he may actually have consulted with the housebuilding industry.

First, he acknowledged the stopper a lack of housing puts on the nation’s productivity. That, he said, is what makes easing the housing crisis so urgent. He has also cottoned on to the vital link between housing and infrastructure. If only he had abolished stamp duty, he would have become the rarest of beasts: a politician who actually listens.

As ever, the devil will be in the detail – or hopefully a White Paper due out later this year – however this year’s Autumn Statement offered plenty of cheer to keep housebuilders going through the winter.

WHAT THE INDUSTRY IS SAYING ABOUT…

£1.4 billion to build 40,000 new affordable homes

“The extra investment to support the building of 40,000 new affordable homes and the greater flexibility in funding for housing providers to build homes of all tenures, both of which we had asked for, are particularly welcome,” said Terrie Alafat CBE, chief executive of the Chartered Institute of Housing.

But…

“It is important that the fund can quickly translate into unlocking land through purchases,” said Henry Smith, CEO, Aitch Group. “Unfortunately it is sometimes so difficult to access these funds, that by the time they are available, the opportunity is missed. Hopefully this announcement will help create new homes for a generation that desperately needs them.”

£2.3 billion Housing Infrastructure Fund

“The main pledge today – a £2.3bn fund for 100,000 new homes in high demand areas – is relatively substantial, but even smarter is the focus on infrastructure spending in ways and places that support new development,” said Property Frontiers CEO Ray Withers.

But…

Sarah McMonagle, Director of External Affairs at the FMB, said, “As council budgets have been stripped back, local authorities have increasingly looked to developers, including even the very smallest developers, to plug these funding gaps. Heavy demands for Section 106 and Community Infrastructure Levy can make many small developments unviable. Key to the Fund’s success will be to ensure that it focuses on unlocking large numbers of small sites and not just small numbers of large sites.”

Relaxed restrictions on how existing affordable housing funding can be used

“We have been calling on the Government to relax restrictions on existing affordable housing funding, so we are delighted with this announcement,” said David Orr, Chief Executive at the National Housing Federation. “Increased flexibility and extra investment will give housing associations the freedom and confidence to build even more affordable homes, including for rent, more quickly across the country.”

Right-to-buy

“Opening up right-to-buy for Housing Association tenants certainly has potential and it is sensible that this is being trialled by pilot,” said Jeremy Blackburn, Head of UK Policy (RICS). “However, we must ensure that mechanisms for replacing all sold stock are thoroughly tested in order to protect our most vulnerable.”

Stamp Duty

“While £1.4 billion of new funding for 40,000 new affordable homes is welcome, the Chancellor is giving with one hand and taking with the other,” said Louisa Brodie, Head of Search & Acquisitions at Banda Property. “It makes little sense to leave stamp duty rates disproportionately high which directly impacts the supply of affordable homes, particularly in London. The market is at a standstill and housebuilders are nervous. Fewer schemes are going ahead, which is reducing the number of affordable homes being delivered by the private sector through Section 106 agreements.

“Discouraging the buying and selling of property in London benefits no-one, least of all those in need of affordable homes. The Chancellor has missed a huge opportunity to reverse the mistakes made by his predecessor and oil the engine of the London property market by reforming prohibitive stamp duty charges.”

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