Did the Autumn Budget deliver for housing?
Jonathan Dyke, Strategic Land Director at IM Land summarises yesterdays announcements
After weeks of promises that this would be a ‘budget for housing’, the Prime Minister promising to take “personal charge” in solving the housing crisis and the Communities Secretary calling for £50bn of investment, the industry had reason to be hopeful that the Autumn Budget would deliver for housing. So, should we be celebrating?
Let’s look at the positives. Not quite the £50bn Sajid Javid was after but £44bn of additional funding is not only welcome, but essential if we are to deliver the 300,000 new homes a year that this budget has clearly targeted. We’re also delighted to see the Government is committing real support to the challenge of improving construction skills in the UK with the £34m boost to training. Add to this the scrapping of stamp duty for most first-time buyers and the boost to the Help to Buy scheme, it’s all good news.
However, the real challenge we face is delivering the right homes, in the right places and of the right quality. Building 300,000 new homes each year is a significant challenge and will require a range of solutions from city centre developments to urban extensions and new settlements. The key is that any new housing is in a sustainable location which is well connected and with the right infrastructure.
It was also good to see the Chancellor pledge his commitment to supporting development and growth across the regions and we welcome the £1.7bn funding committed to transforming cities. We believe the priority promotion of development in existing urban areas and around transport hubs is the right course of action and look forward to an invigorated pace of development as we strive to meet the ambitious house building targets.
While the Chancellor didn’t go as far as some reports suggested he might, in terms of a possible reclassification of green belt – he did commit to some ‘planning reforms’. The planning system may not be perfect, however further changes will put added pressure on local authorities that already have stretched resources. Therefore, we welcome the commitment to providing more help and support for local authorities.
While we are yet to see the detail of any planning reforms, one area that the Chancellor focused on is the issue of planning permissions not being built out. When it comes to ‘landbanking’ it is certainly not as simple as housebuilders sitting on sites. There are various things that can prevent consented sites being built on – such as viability and other economic issues including existing use values and the cost of relocating businesses to unlock and assemble sites.
In summary the budget has delivered funding, however a careful balance is needed to ensure that the additional funding does not result in brownfield land values rising unsustainably if the HCA and other government bodies are able to bid alongside private sector developers. And when it comes to planning reform, we need to see the detail, but it’s important that any changes continue to support the rebalancing of the economy which is critical to the ongoing success of the UK.