In his first Autumn Statement as Chancellor of the Exchequer, Philip Hammond highlighted housing as one of the Government’s four areas seen as “critical for improving productivity”, allocating funds to support infrastructure and speed up construction.
Hammond’s headline announcement was the creation of a £23bn national productivity investment fund, split into allocations across his priority areas; housing; transport; digital communications, and research and development.
Around £7bn would be channeled into the housing sector, he said.
Money from the NPIF would cover the £2.3bn housing infrastructure fund announced earlier this week, “unlocking new private housebuilding in areas where housing need is greatest”, with a target of delivering 100,000 units.
In addition, for affordable housing, Hammond allocated £1.4bn to support the construction of 40,000 homes, and relaxed restrictions on grant applications from the Affordable Homes Programme to open it up to support other tenures such as shared ownership.
Under the NPIF, the Government said it would invest £1.7bn by 2020-21 to speed up housebuilding on public sector land in England through partnerships with private sector developers. This follows on from the Government’s allocation of 26 housing zones over the past year, granting a “special status” to enable faster construction on brownfield land. Zones in Blackburn, Burnley and Wirral Waters were the latest to be announced earlier this month.
Hammond acknowledged that there were still many challenges facing housing construction, and said that: “Building more homes is central to this Government’s vision of a country that works for everyone.”
He told the Commons to expect the imminent publication of a white paper from Communities Secretary Sajid Javid “setting out measures to help us deliver this ambition”.
Mark Hurley, director at professional services and engineering firm, WSP | Parsons Brinckerhoff in Manchester, said: “The £2.3bn Housing Infrastructure Fund is a positive step in addressing the housing deficit in our region, but the Government will need to be clear in ensuring private and public sectors understand how to access this funding by creating clear commercial funding models for social infrastructure projects.”
Melanie Leech, chief executive of the British Property Federation, said: “This Budget’s hidden gem is the spending on infrastructure to help bring forward housing sites. Infrastructure spending is housing delivery’s silver bullet and the considerable commitment to invest about £2bn a year is therefore very welcome. The £1.7bn for accelerated construction on public land will also help upscale the modular construction sector, meaning a more efficient industry and the faster delivery of homes.
“We are also looking forward to the housing white paper and the policies that Government is working on. We desperately need far more homes and the Build-to-Rent sector is there to support Government meet that objective. Most large-scale Build-to-Rent landlords do not charge tenants fees and therefore they will not be particularly perturbed by the Chancellor’s announcement, but what is banned and how it works in practice will need carefully working through.”
Stephen Hogg, lead director of residential at JLL in Manchester, said: “We welcome the announcement of new affordable housing investment and are particularly encouraged by the decision to share this support across both ownership and rental tenures. This is a shift in policy emphasis from the previous Government and better reflects the broad base of housing need.
“£1.4bn however is a drop in the ocean when it comes to the scale of UK’s housing need. The Chancellor’s hands are tied with the deficit continuing to grow, but there is a huge wave of private sector money seeking to invest in Britain’s housing stock. He should aggressively be seeking out private partnerships – there is no time to waste.”
Richard Walters, director of planning and development at GVA, said: “We welcome the Chancellor‘s announcement to help address the housing supply shortfall, including a £1.4m cash injection for housing to help deliver some 40,000 new homes and the £2.3 billion Housing Infrastructure Fund to deliver a further 100,000. However his announcement does not go far enough we feel in other areas. Nor is there much evidence yet from today’s announcement, and we are yet to see the small print in the wider report, that any deeper policy is in situ to address the long term structural issues of housing supply, and to drive forward housing and estates renewal outside of London.”