The Chancellor of the Exchequer, Philip Hammond, gave his first Autumn Statement in Parliament today.
He announced measures to build 140,000 new homes, to ban lettings agent fees for tenants but there were no changes announced to stamp duty.
He pledged to tackle “the housing challenge” by investing £2.3bn to “unlock land for housing” to deliver infrastructure for up to 100,000 new homes “in areas of high demand and to provide affordable housing that supports a wide range of need we will invest £1.4bn to deliver another 40,000 additional affordable homes.” The 40,000 extral homes are to be built by 2020/21.
This is in addition to the £3bn Home Builders Fund that was announced previously, which will help smaller family firms build 25,000 new homes by 2020 and up to 225,000 in the longer term.
He also announced a large scale regional pilot of Right to Buy for housing association tenants and continued support for homeownership through the Help to Buy equity loan scheme and the Help to Buy ISA.
Stephen Stone, chief executive of housebuilder Crest Nicholson, said: “Crest Nicholson welcomes Philip Hammond’s commitment to double annual capital spending on housing.The UK continues to be challenged by a short supply of suitable, affordable housing stock in addition to ambitious targets to reach in order to meet a growing population. It should help to make the dream of owning a house a reality for a significant number of people.
“The investment is another reminder of how the housebuilding industry must pull together and address its growing skills gap in order to continue to deliver quality housing across the UK.”
Andy Hill, chief executive at Hill, said: “The new £2.3bn Housing Infrastructure Fund, announced in today’s Autumn Statement, is a win-win for the UK economy and housing market. This fund will give housebuilders a helping hand to accelerate the delivery of new homes in high demand localities such as London, Cambridge and Oxford.
“We won’t know the content of the Housing White Paper until later this year, but it was positive to hear the Chancellor’s renewed commitment to Help to Buy and we hope to see further support down the road. However, it was disappointing that government didn’t take any steps this afternoon to address the imbalance in stamp duty that is distorting some areas of the market.”
David Orr, chief executive of the National Housing Federation, said: “Increased flexibility and extra investment will give housing associations the freedom and confidence to build even more affordable homes, more quickly.”
Stamp duty
The Chancellor abolished lettings fees on private rental sector tenants in England. He said this would help around 4.3m tenants save an estimated £337 each. There was no mention of any further changes to stamp duty, an area that was flagged for reform by WhatHouse? readers in our survey on what they believe should be the housing policy priorities for Theresa May.
Duncan Walker, managing director of Renaissance Villages, said: “By failing to address levels of stamp duty, the Chancellor has missed an opportunity to speed up the lengthy chains delaying downsizers selling family homes. This was an opportunity for the Chancellor to introduce an incentive for people buying a family home from a downsizing owner."
Hammond said he would relax planning regulations to so that “providers” can build a wider range of new homes, and, for London he announced that £3bn would be spent on up to 90,000 affordable homes.
Housing Infrastructure Fund
Clynton Nel, residential director at JOHNS&CO, comments: “The introduction of the new £2.3bn Housing Infrastructure Fund, in addition to relaxed restrictions on housing grants to allow for the construction of a wider choice of housing types, will help to loosen the shackles of the building industry.”
During Prime Minister’s Questions, Theresa May admitted that there needs to be more homes built and said that 900,000 had been built since 2010. Official figures show that 189,900 homes were built or converted in the financial year 2015-16, up 11% on the previous year.
The Chancellor confirmed that a government White Paper on housing will be published by the Department of Communities and Local Government, though there was no confirmed date for when it will be completed.
Ishann Malhi, CEO and founder of online mortgage broker Trussl said: “We needed a radical injection of new houses in the UK from today’s Autumn Statement, and the Chancellor certainly hasn’t ducked the issue. £7.2bn to support the construction of new homes and a housing white paper which will soon tell us exactly how he plans to address the long term underlying issues.”
Mr Hammond concluded his comments on housing policy, saying: “This package means that over the course of this parliament the government expects to more than double in real terms annual capital spending on housing, coupled with our resolve to tackle the long term challenges of land supply this commitment to housing deliver represents a step change in our ambition to increase the supply of homes for sale and for rent to deliver a housing market that works for everyone.”
The Shadow Chancellor, John McDonnell, in his response said: "The government has spoken about the dream of home ownership for the young. Nothing announced today is of the scale needed to suggest it will remain anything other than a dream.”
Industry response
Martin Walshe, director, Cheffins Residential Sales said: “For too long excessive stamp duty has stifled the property market causing a constriction on transaction levels and spiralling prices. The decision not to cut this excessive tax rate will mean that the market continues to stagnate, with prices increasing due to a lack of stock on the market.”
Founder and CEO of eMoov.co.uk, Russell Quirk, said: “Talk is cheap even if the numbers being bandied about today are not. And it remains to be seen how the announcement and the money will actually lead to more houses being built in practice.
“The government must realise that these announcements are all well and good but it isn’t the funding that is the issue and, until they address the mechanism itself, little will come of it. Where is the land going to come from? How will the planning process be expedited? These are all questions that need answers with actions not just words if the current crisis is to be tackled head on.”
Frank Pennal, CEO property division of Close Brothers, said: “Today’s announcement will be welcomed by small housebuilders across the UK as they look for relief amid their struggle to overcome the challenges of the current planning system, industry skills shortages and uncertainty over how Brexit negotiations will impact their business."
Martin Skinner, CEO Inspired Homes said: “It is vitally important that these new measures quickly filter to homebuilders so we can begin work. Young people who are currently locked out of the buying market, especially in London, will only see this as a step in the right direction when new affordable homes are actually created.”
Henry Smith, CEO, Aitch Group, said: “I welcome Philip Hammond’s announcement that the Government will double annual spend on housing as it finally takes action to help address a chronic shortage of homes. It is important that the fund can quickly translate into unlocking land through purchases.”
View our infographic on Theresa May and housing policy