Just a few weeks ago Theresa May dedicated what remains of her premiership to fixing the housing problem. A bold claim and one which she almost immediately passed to besieged Phillip Hammond to deliver in his Budget today. A housing solution?
And Spreadsheet Phil has come up with an interesting package of measures, but is there any real substance here?
The answer is not really. The Chancellor has announced a few new measures, repackaged a few older measures and carefully sought to break down the dominance of the big house builders but there is no grand plan – and of course the Green Belt will remain sacrosanct.
One eye catching measure was a commitment to use New Town Development Corporations to deliver five “locally agreed” new towns in areas of “demand pressure”. These will be delivered through public private partnership to attract international investment. There appeared to be a loose link between the New Town measures and the Infrastructure Commissions report into the brain belt. The Commissions vision of 1m homes in the area by 2050 and the attendant road and rail infrastructure was whole heartedly “backed” but any form of funding to support the warm words was absent.
Another initiative is to rebrand the HCA to become Homes England with a remit to deliver new homes where they are needed, complete with new CPO powers. This had been trailed in the White Paper in February but has now been given new impetus. A lot may depend on who heads the new agency and their drive to deliver change.
Hammond’s commitment to get Britain building is to be backed by £44bn of funds for capital investment, loans and guarantees – most of which has already been announced in one form or another. But, disappointingly, the date to reach the delivery target of 300,000 new homes a year has been pushed out to the mid-2020s.
To help reach those rates of delivery there will be new money to support SME house builders and there will be an urgent review of the gap between granted permissions and actual building rates. The review will be chaired by Oliver Letwin and will be expected to report back in time for the Spring statement next year. Both of these measures are expected to put pressure on the bigger house builders.
Infrastructure also got a boost with the doubling of the Housing Infrastructure Fund (HIF), which so many authorities are depending on to unlock significant proportions of their local plans. For the bigger cities, £400m, a relative drop in the ocean, was given to estate regeneration while £1.1bn was given to unlocking strategic sites and urban regeneration schemes.
For councils “in high demand areas” the Housing Revenue Account borrowing limits are to be relaxed. The measure is in line with a DCLG report from April (Capacity in the Home Building Industry) to allow councils to make a more significant contribution to house building in their areas. Or put another way, this can be seen as the Government seeking another means to breaking the dominance of the biggest house builders.
While the industry may be looking at the measures and thinking “where are the big ideas we were promised”, many of the most interesting measures have been saved for the demand side. The Tories have finally realised that first time buyers are also voters and that currently, Corbyn has a strangle hold on them.
For properties of £300,000 or less, stamp duty for first time buyers will be wiped out forever (or at least until a different government comes to office). For those in London or other high value areas, there will be no stamp duty on the first £300,000 of properties worth up to £500,000.
So does this all add up to a whole hill of beans (to borrow a phrase)? Not really. More reheated announcements and re-branded funding pots. A bit of new cash and an eye-catching reduction in stamp duty for politically important voters. Perhaps the most deflating part of this set of bold initiatives is the pushing out of the 300,000 homes a year target to the mid-2020s. Not so bold after all then….
Now we just have to wait for the promised statement from Sajid Javid to find out what the Chancellor really meant (queue frantic work behind the scenes by civil servants).
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