While the Chancellor’s Autumn Statement has been welcomed by many in the property industry, question marks remain as to whether it will actually have much impact on home ownership.
Philip Hammond told MPs in his first Autumn Statement that the government was going to pump £1.4 billion into affordable housing schemes with the aim of delivering 40,000 new homes.
The money is set to be shared between the shared ownership, rent to buy and affordable rent schemes.
Betsy Dillner, director of Generation Rent, said the boost to affordable housing was unlikely to make much difference to housing supply.
“The government’s previous obsession with home ownership meant that funding wasn’t getting to the people most in need of affordable housing,” said Dillner.
“By giving builders more flexibility over what tenure of homes they build, the government has made it easier to provide homes for people on the lowest incomes, but there’s still more they could do. The 40,000 homes to be built over four years won’t make a big difference – through new taxes on landlords the government is raising enough to fund 40,000 new homes every year,” she added.
Jason Orme, spokesperson for The Homebuilding and Renovating Shows, cast doubts on the ability of mainstream housing providers to deliver additional supply.
He said: “This feels like the latest in a series of measures to try to shock the existing housing suppliers into delivering more. What we really need is to allow the people who need new homes the chance to create them for themselves – a truly demand-driven, bottom up reworking of the housing market as opposed to continuing with the current top-down model. The emerging self and custom build market allows this, but we need to see it supported in the same way.”
Paul Smith, CEO of haart estate agents, said: “Although more affordable homes are good news, they won’t be available to the majority of young professionals that make up Generation Rent, who have to save for both their deposit and stamp duty. A stamp duty holiday would have provided a boost to the whole economy and got more people onto the property ladder quickly – we could have seen the impact by Christmas.”
Housing Infrastructure Fund
The Government said £2.3 billion would also be spent on a new housing infrastructure fund for projects such as roads and water connections.
Hammond said this would support the construction of up to 100,000 new homes in the areas where they are needed most.
John Newcomb, managing director of the Builders Merchants Federation, said: “We welcome the Housing Infrastructure Fund. It will help to invigorate the market by encouraging house building, particularly in areas like London where housing is in high demand. It will also help to create jobs and growth in construction and the wider UK Economy.”
Robin Fieth, BSA Chief Executive, said: “Building Societies Association research shows that the main reason why people oppose new houses being built in their area is because of concerns about increased pressure on local infrastructure. This fund should contribute to alleviating these concerns and support an increase in housebuilding.”
Andy Sommerville, director of Search Acumen, said: “However, the reality is that such investment is modest in the context of the groaning gap between supply and demand. The Chancellor said himself that ‘for too many the goal of home ownership remains out of reach’ and we must await the housing white paper for further clarity on how this ambition is to be truly revived.”
Right to Buy
The Chancellor also announced a large-scale regional pilot of Right to Buy to allow housing association tenants to buy their properties.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “It sounds to me as though the government is kicking Right to Buy into the long grass. It was a manifesto commitment to roll it out across the country but the government isn’t going to do that now because it is nervous about the cost.
“One size does not fit all when it comes to housing and what is appropriate in one area where there is a shortage, or the type of property may not be suitable – three-bed semis for example, rather than flats in tower blocks. There is another supply issue here because stock is not being replaced on a one-for-one basis, as was originally promised.”
