Industry respond to the "make or break" budget

// HA News

This afternoon Chancellor Philip Hammond delivered his 'make or break' autumn budget to the chamber. Touching on key issues such as the housing crisis, skills shortages fire safety, and planning reform, the latest budget included much for the social and affordable housing sectors to get excited about. But with the Chancellor's promise of 300,000 new homes a year by mid-2020s, will the range of measures signalled in today's Budget be enough to achieve that ambitious target? HA Magazine takes a look at what the industry is saying in response:

Housebuilding increase

A lot has been made in the run-up to the budget of the Government’s expected target to build 300,000 new homes next year. Speaking about this afternoon’s announcement, Bjorn Howard, CEO of Aster Group, said “We welcome the clear-cut push to increase housing stock, but would have liked Mr Hammond to have acknowledged that variety is as much a problem as volume for the sector. 

“Policy updates like the removal of stamp duty for first-time buyers are positive steps. We look forward to seeing how some of the key ideas mooted in the housing white paper, such as an increased focus on shared ownership, will be acted on.

“Housing is increasingly a point of division in society. Remedying this depends on tackling affordability and choice in the market, including greater availability of alternatives to traditional rent and homeownership options, such as shared ownership. This is where housing associations, alongside local councils empowered by greater borrowing freedom, can play an important role in increasing the number of affordable homes across the UK.”

David Gray, Bid Development Director at AM Bid, added “The Chancellor’s announcement of £1.5bn of new money for the Home Builders Fund will be welcome news for SME housebuilders looking to bid for construction contracts across the UK.

“Moreover, the commitment to provide at least £44bn capital funding, loans and guarantees to support the housing market over the next five years, should result in a marked increase in construction contract opportunities. These contracts will be necessary to help support the delivery of the 300,000 new homes per year the Government is aiming to deliver by the mid-2020s, which would represent the highest level of new housebuilding seen in the UK since the 1970s.”

Homelessness

Right now – thousands of people are living rough on the streets or in unstable and unsuitable temporary accommodation with nowhere to turn. With homelessness on the rise and the cold winter months closing in, it’s more urgent than ever that we fix this crisis now.

Paul Butterworth, partner and head of the social housing team at law firm TLT, commented “The pressure to deal with homelessness has clearly struck a chord with the Chancellor, with Housing First pilots being announced in Manchester, Liverpool and the West Midlands accompanied by a bold aim to halve homelessness by 2022 and eliminate it by 2027.

“The 100% council tax premium on empty properties is an interesting policy but it is unknown exactly how this will translate into reducing housing shortages. We don’t know if this will actually lead to such properties being brought into use.

“The £44 billion financial support for housing is good news but the true significance of this sum will depend on the proportion translating into grant funding for new builds.”

Chief Executive of Crisis Jon Sparkes said “We’re thrilled that with the help of our supporters and politicians across the political spectrum, the Government has recognised that to truly build a country that works for everyone, we must solve our homelessness crisis urgently.

“Building more homes, establishing a Homelessness Task Force, and funding programmes that help homeless people access a stable home through Help to Rent andHousing First schemes are key to supporting those in the most vulnerable circumstances.

“To truly make a success of these schemes the Government must now turn these words into action – firstly by getting the Homelessness Task Force up and running to deal with the emergency of rough sleeping in this country, and to fully support local councils in the roll out of the Homelessness Reduction Act when it comes into effect next year.

“These measures represent real progress and commitment to tackling homelessness. We look forward to working closely with the government on these measures, and ultimately, to put an end to homelessness in Britain once and for all.”

Borrowing caps

On Housing Revenue Account borrowing caps being lifted for councils in high-demand areas, Gavin Smart, deputy chief executive at the Chartered Institute of Housing (CIH), said “We have long argued that if we are going to build the homes we need councils will have to play a major part and we welcome measures to support this. The government has made a series of announcements in recent months which lay the foundation for housing associations to commit to developing many more new homes and we must do the same for councils. Relaxing borrowing caps for councils in high demand areas is very positive – we hope to see the government build on this move so that we see a return to the levels of council house building we need.”

Help to Buy

Interestingly, the Help to Buy scheme extension was not addressed in today’s Autumn Budget.

Jeremy Duncombe, Director, Legal & General Mortgage Club commented “The lack of clarification in today’s Budget about the future of the Help to Buy scheme will no doubt have left some housebuilders in a state of limbo. Having only been guaranteed until 2021, we urgently need confirmation as to what will happen to the scheme after this date, to enable both developers and lenders to plan for the long-term.”

Build to Rent

The Government’s push for longer-term tenancies is very welcome news for the build to rent sector and for UK renters.

Dominic Martin, Head of Operations at Atlas Residential said “Providing the customer with greater flexibility and security through long-term tenancies is a positive step forward for the rental market and an acknowledgement that the customer should remain firmly at the heart of everything we do – these are people’s homes.”

Stamp duty

Commenting on stamp duty, Craig McKinlay, Sales and Marketing Director, said “The Northview Group comments on the Autumn Budget “An exemption of Stamp Duty for first time buyers on properties below £300k  is certainly a positive move from the Government to help free up bottlenecks in the housing market. This land tax has been a major stumbling block for younger buyers amidst rising property prices.

“Though these new measures will make it easier for buyers to move up the housing ladder, it’s essential that as an industry we continue to help borrowers by offering good value for money, particularly amid the recent base rate rise.”

In summary

It was dubbed as Hammond’s ‘make-or-break’ budget; there were three key challenges facing the Chancellor today in a budget which was delivered against a background of Brexit and a substantial decline in growth forecasts which threatened his tenure. Housing, infrastructure and productivity announcements were the Holy Trinity designed to save his job.

Whilst the industry appears to welcome the government’s ambitious new target to deliver 300,000 new homes a year overall, concerns still remain about how we will build the right homes in the right places. And how will we ensure that they are affordable?

Abolishing stamp duty for first time buyers is welcomed, as is some form of planning reform but there was a meagre sum mentioned for training and throwing money at the housing crisis will not solve the labour shortage or skills crisis. Infrastructure investment is also welcome but we need concrete timelines rather than further hollow promises. Productivity is a complex issue and his comments on the role of digital enablement underlined that, as an industry, we need to help ourselves but again, short term improvement is linked to a guaranteed labour pool and Brexit has caused a stampede of trades out of the UK, something this government has exacerbated through their dithering. So the overall impression from the sector seems to be that it was a stalwart attempt but not enough to instil confidence as we crash out of Europe.

View The Latest Issue