The government has given first-time buyers a boost in the Autumn Statement with the announcement that £1.4 billion will be invested in affordable housing.
Chancellor Philip Hammond said in his first Autumn Statement that the government would inject £1.4 billion into affordable housing schemes, which the Treasury estimates will deliver 40,000 new homes.
The money will be shared between the shared ownership, rent to buy and affordable rent schemes.
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.
He said the government expects to more than double annual capital spending on housing and that restrictions on government grant would be relaxed to allow a wider range of housing-types.
“Coupled with our resolve to tackle the long term challenges of land supply this commitment to housing delivery 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,” he added.
The Chancellor also announced a large-scale regional pilot of Right to Buy to allow housing association tenants to buy their properties.
Campbell Robb, Shelter’s chief executive, welcomed the move on the new investment in affordable housing but said the “devil will be in the detail”.
He said: “It’s promising to see restrictions on funding relaxed, which should help to build the homes that those struggling actually need – including affordable homes to rent.
“At Shelter we see the impact of our chronic shortage of affordable homes every day, with increasing numbers of people left with no choice but to fork out most of their hard-earned wages on expensive private rents, and wave goodbye to the chance of a stable home.”
Despite welcoming the news, Mark Hayward, managing director of the National Association of Estate Agents, said the number of homes was still “painfully short” of what was needed to solve the housing crisis.
He said: “We hope that the Government will announce an intent to do much more when it releases a widely expected White Paper at the Autumn Statement today. It is vital that the Government uses this to signal a radical rethink in its housing strategy and consider measures such as building homes on unused Green Belt land to really kick start the house building boom we badly need.”
Letting agent fees
Letting agents will also be banned from charging tenants fees, a decision which is likely to prove controversial.
The ban on letting agency fees will help ease the burden on 4.3 million households currently in rented accommodation who are hit with an average of £337 in charges on top of what they pay in rent.
The move comes despite being strongly opposed by David Cameron’s Government, which ignored calls from the Labour party to ban rent fees earlier this year.
Robb said: “Millions of renters in England have felt the financial strain of unfair letting agent fees for far too long, so we’re delighted with the government’s decision to ban them. We’ve long been campaigning on this issue and it’s great to see that the government has taken note.”
Shelter’s research has found that landlords in Scotland – where fees are already banned – were no more likely to increase rent than anywhere else in the UK.
However, Richard Lambert, chief executive of the National Landlords Association, said banning letting agent fees could “boomerang” back on tenants.
He pointed out that while some unscrupulous agents have got away with excessive, landlords may have to hike rents to cope with the loss of revenue.
“Agents will have no other option than to shift the fees on to landlords, which many will argue is more appropriate, since the landlord employs the agent. But adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents,” Lambert said.
