George Osborne set out government spending plans up to 2020 today, which included billions of pounds in cuts but also new money allocation to build more homes for Britain.
Despite the Spending Review highlighting £20bn of cuts to Whitehall budgets and £12bn to welfare, a £7bn pledge was made to double housing budget to £2bn per year and prioritise housebuilding and deliver over 400,000 affordable homes for sale by 2020.
Mr Osborne promised to help bring an end to what he calls a "crisis of home ownership in our country", pledging a "bold plan to back families who aspire to buy their own home".
The Autumn Statement saw the biggest affordable housebuilding programme announced since the the 1970s.
The plan involves:
- £2.3bn sum to be given to housing developers to build new "starter homes", which are targeted at first-time buyers, who will receive a 20% discount when purchasing a house with a value of up to £250,000 across Britain and £450,000 in the London area.
- £4bn to assist in the building of 135,000 "Help to Buy: Shared Ownership" homes for households with a collective income of less than £80,000, or £90,000 in London.
- £200m to build 10,000 new homes where tenants can live in for 5 years at a reduced rent rate, giving them an opportunity to save enough money for a deposit. They will then have "first right" to buy that home.
- £400m to provide 8,000 specialist homes for older people or tenants with disabilities
- Extending right to buy to Housing Association tenants
- Addressing London housing crisis with an new “London help to buy” scheme
The statement made some pretty bold promises that, if fulfilled, could prove of great value to the housing industry. However, some are understandably sceptical of what has been pledged. Adam Male of online estate agent Urban.co.uk said “With much of the country clamouring for affordable housing, George Osborne giving the nod and releasing some capital to private sector development is a very positive step. However, with £2.3 billion of taxpayer’s money being waved tantalisingly about, there must be stricter policing enforced to make sure that not every Tom, Dick and Harry suddenly becomes a ‘developer’ just to take a slice of Mr Osborne’s pie. It’s true that first-time buyers are desperate to get on the ladder, but we must be careful that our first time buyers don’t end up like the Three Little Pigs, some shivering and vulnerable in a shoddy straw house, with only the lucky ones ending up with sturdy brick.”
“The £200 million budgeted for that will subsidise rent on 10,000 homes nationally, allowing tenants to help save for a deposit is great news. Results from Urban.co.uk’s Tenant Survey 2015 that 61% of tenants cite buying costs as their biggest barrier to getting on the property ladder, so any incentive will be a huge help to many.”
“However, until the homes are built and buyers have the keys in their hands and their feet firmly under the table, I believe that many will still be wary about the government’s ability to make much of a difference in today’s choppy property market. With 65% of tenants negative about their property prospects, Mr Osborne has a long way to go in order to change the overall wariness about the ability to succeed in the property market.”