Blog

arrow-leftarrow-rightclosecontentengagement-sqengagementgrouphexagonmarkerminusplayplus
17/11/2017

Housing Rumour Run-Down - Autumn Budget 2017

Written by Tom Beckford

Junior Account Executive

With the Autumn Budget just a few days away and the rumour mill in full swing, Remarkable has compiled a handy guide to the housing policies that could feature in Philip Hammond’s statement on 22 November.

 

1. £50bn of extra borrowing for Local Authorities to build homes

Secretary of State for Communities and Local Government, Sajid Javid, has suggested taking advantage of record-low interest rates to borrow £50bn for housebuilding, with interest payments supported by rents or proceeds from home sales, but Chancellor Philip Hammond has denied this is official government policy.

2. Cut in Stamp Duty for first-time buyers

Philip Hammond and Prime Minister Theresa May are under pressure to deliver additional housing and promote home-ownership. Philip Hammond would prefer a cut in Stamp Duty as, unlike £50bn of additional borrowing, it would not break his fiscal rules. 

3. Creation of ‘Skills Villages’ near building sites

Alongside the “housing crisis”, there is also a skills crisis emerging in construction. Homes cannot be built at the required rate if there is a shortage of workers – a problem the industry fears could be exacerbated by Brexit.

Phillip Hammond may be proposing to create ‘skills villages’ near building sites to train workers quickly. The National Federation of Builders supports this, saying that SME investment is the way to solve the housing crisis, adding that Help to Buy has lined builders’ pockets without addressing the skills shortage.

4. Build more bungalows to tackle the housing crisis

Treasury Select Committee Chair, Nicky Morgan, has called for the construction of more bungalows and elderly housing, as regions including the Midlands are seeing a desperate shortage of housing for those later in life. The move would also free up large family homes, enabling young families to occupy properties fit for their requirements.

5. Councils demand more power over Right to Buy

The LGA is calling on the Government to allow councils to retain 100% of Rent to Buy receipts, as this would give them more freedom to borrow to invest. Only one in three Rent to Buy homes sold have been replaced, leaving a shortfall of 43,000 homes.

Polly Neate of Shelter said the “Government has a real opportunity to set things right in the upcoming budget” after handing control to developers has created a chronic shortage of affordable housing.

6. Industry urges Philip Hammond to relax building height rules

Housing providers have written to the Chancellor, urging him to permit height extensions to existing buildings without requiring a further planning application. The letter is part of the ‘build up, not out’ proposals championed by Tory MP John Penrose, which aims to produce mansion blocks rather than towers, and avoid greenbelt construction. 

7. Theresa May to give councils power to force-buy greenfield land in Budget:

Former Tory minister Nick Boles has set out his blueprint for resolving the housing crisis:

  • Creating a ‘Grenfell Housing Commission’ to build 50,000 homes a year, raising £50bn with a special Grenfell Housing Bond which should pay for new homes on public land
  • Reform the land market to cap the profits of wealthy landowners
  • Councils should be given powers to buy land for new housing “at a reasonable price”
  • Tell big housebuilders to stop dragging their feet and build on sites where permission has been granted, otherwise forcing them to offer plots to developers who will build urgently
  • Allow house owners to add one or two storeys without planning permission, up to a four-storey limit, to increase density – but the design must fit into the local area

8. Utilising Government-owned brownfield sites for housing

Another option for Phillip Hammond is to allow the development of housing on existing public-owned brownfield sites, however this would not provide a comprehensive solution to the crisis. 

9. Government planning a ‘fresh raid’ on buy-to-let landlords

The 3% stamp duty increase has not dented the buy to let market, and thus Phillip Hammond is considering additional restrictions on the Buy to let sector. Deemed unlikely as a phased cut in tax relief for landlords was introduced in April 2016 and will not be fully functional until 2020.

 

Subscribe today to stay abreast of the all the housing announcements in the Autumn Budget.