Measures announced as part of the Spring Statement:
- A £100 million fund for the West Midlands to support the mayor’s target of delivering 215,000 homes by 2030 to 2031.
- A £1.67 billion funding package for London to build 26,000 more affordable homes; at least two-thirds of the homes built with this additional funding will be for rent.
- £60 million investment to boost the Housing Growth Partnership fund that supports small and medium sized housebuilders.
- Early findings of the independent review to understand why hundreds of thousands of homes haven’t been built, despite having planning permission has been published in a letter to the Chancellor and Sajid Javid.
In fairness to Phillip Hammond, he had already made clear the fact that the Spring Statement wouldn’t contain any surprises. Last year he announced that the spring statement would serve as an economic summery while the chancellor keeps his powder dry for the Autumn Statement. Nonetheless, there were some disappointed viewers.
Russell Pedley, co-founder and director of Assael Architecture, said, “Housing is still at the top of the political agenda after the Prime Minister’s speech last week. Yet, today’s Spring Statement lacked the substance that much of the industry would have hoped for. We still remain in the depths of a housing crisis, which requires a marked change in housing policy and further government intervention into the market.
“Some progress has been made such as with the publication of the draft NPPF last week and a further boost for Build to Rent in the Planning Practice Guidance, but the government must follow through on the promises made in both the Housing White Paper and the Industrial Strategy to deliver the homes we desperately need throughout the country. If not, the current situation is only set to worsen.”
Jason Rishover, CEO of Heronslea Group added, “As expected there were no major tax or spending rises, and again stamp duty was not addressed – the thorn in the housing market’s side, which needs a complete overhaul. There remains the huge tax burden on properties upwards of £900k. The higher stamp duty evidently hasn’t worked so far – it’s just served to freeze the market from the top downwards.
“So a mixed bag as we move into the prime spring selling market, with no significant changes from the government. The economy is looking better – but again no changes to stamp duty for the higher end of the market, which ultimately is what we were all hoping for.”
Others, however, were more forgiving. “So, we spring into the house buying season with no significant setbacks from the government,” said Martin Bikhit, Managing Director at Kay & Co. “Economic conditions are showing some improvement, and the sun usually brings the buyers out, so we are ready to greet the season with optimism.
“Philip Hammond promised no red box, no official document, no spending increases, no tax changes. No other economy makes hundreds of tax changes twice a year, and neither should we, he said. For once, a politician is sticking to his word.”
Camilla Dell, Managing Partner at Black Brick added, “We have a more measured and sensible Chancellor who is withholding his big announcements for the Budget this autumn. We see this in a positive light, as the London property market needs stability and to date there has been constant change and uncertainty. The pledge of £1.7 billion investment to build 26,000 affordable houses in London by 2022 is good news, however, pumping money into the market alone will not solve the problem.
“The government needs to support housebuilders and incentivise them to build the right type of accommodation Londoners need, in the right areas, at the correct price. A healthy market isn’t just about supporting the bottom end of the market. The volume of transactions taking place across all price points is also important. Stamp duty changes have crippled the London market, particularly in the prime and super-prime sectors, with volumes falling nearly 40% since stamp duty changes were introduced.
At least the chancellor’s headlines announcements should give some cause for cheer. Economic growth is up and higher than originally predicted, with an improvement in the global economy helping Britain. GDP for 2017 came in at 1.7%, up from the 1.5% predicted. Good news as it shows that Brexit isn’t having too much of an impact. Yet.