Philip Hammond

BUDGET | £44bn housing package as Hammond promises planning reforms

Chancellor Philip Hammond has confirmed a £44bn stimulus package for housebuilding over the next five years, including £15.3bn of new funding, alongside support for planning reform and scrapping stamp duty for first-time buyer homes under £300,000.

Key measures included a £1.5bn allocation to the existing £3bn Home Building Fund for loans to SME housebuilders; an £8bn package of guarantees to support private sector housebuilding; a £2.7bn extension to the Housing Infrastructure Fund to grant local authorities money for strategic infrastructure; and £630m of grant funding for remediation and infrastructure works on small and stalled sites.

Among the key announcements was the abolition of stamp duty for first-time buyers on properties worth under £300,000. It will also apply to first time buyers purchasing homes worth up to £500,000, with no stamp duty paid on the first £300,000. According to the Government’s housing price index, the average property price in the North West is £156,400; compared with £320,200 in the South East and £481,600 in London.

The Office for Budgetary Responsibility estimated this measure would increase house prices by 0.3%, primarily throughout 2018.

The Chancellor also confirmed an additional £400m loan fund towards estates regeneration programmes across the UK, and £1.1bn for a Land Assembly Fund which will assemble fragmented pieces of land into “ready-to-go” sites for developers.

There will also be five new garden towns in the UK, brought forward through public-private partnerships, although the location of these has yet to be determined.

The Government will launch a consultation into speeding up the planning process and ensuring planning permissions are built out faster.

The Government will consult on:

  • The expectation that local authorities will bring forward 20% of their housing supply as small sites;
  • Tougher consequences where planned homes are not being delivered, by setting the threshold at which the presumption in favour of development applies at 75% of housing delivery by 2020;
  • The removal of exemptions from the deemed discharge rules to ensure developments are not held up by delays in discharging planning conditions.

A review panel will be set up by the Government, chaired by Sir Oliver Letwin, to explain the gap between housing completions and the amount of land allocated or permissioned. The panel will present an interim report in time for the Spring Statement in 2018, with a full report to follow at next year’s Budget.

The Homes & Communities Agency will also be renamed Homes England, and will “use investment and planning powers to intervene more actively in the land market,” said the Chancellor.

Alongside these reforms, Hammond announced that Manchester and Liverpool, along with Birmingham, will be the three cities to hold a pilot of the Housing First initiative, with £28m pledged to help end rough sleeping by 2027.

Manchester’s pilot scheme will sit alongside Mayor Andy Burnham’s £1.8m bond for accommodation and health support for homeless people, announced last month.

Reactions

Chris Taylor, managing director of Regency Residential, welcomed the planning reforms but argued that more needed to be done to speed up the planning process.

“Councils haven’t been given the budgets needed to deal with the increasing number of planning applications, which is causing a delay in bringing new homes to market and pushing up house prices as demand outstrips supply,” he said.

“The lengthy and costly procedures involved in pre-and-post planning applications mean that developers are battling against an overly time-consuming, expensive process.

“If the Chancellor were to go further and give councils the green light to increase planning fees by, say, 20% to fund a speedier and more efficient process, many developers would be happy to pay it if it means we’d be able to bring more homes to market.”

Lewis Johnson, RICS parliamentary and public affairs manager, echoed the view that planning reforms needed to go further.

“If the Chancellor really wants to increase supply to a degree that will transform UK housing, he should implement a comprehensive housebuilding programme incorporating direct commissioning by central and local government,” he said.

“There should also be a more fundamental review of the planning system than was announced today, including a policy of green belt swaps so that appropriate sites on the urban edge can be considered for housing supply.”

Karen Campbell-Williams, senior partner at Grant Thornton in the North West, said the Chancellor’s pledges on homelessness showed that Andy Burnham had “been listened to”.

“Our society needs to work for everyone so it was good to see the chancellor announce £28m for three new ‘housing-first’ pilots in Manchester, Liverpool & the West Midlands and a new homelessness task force to eliminate rough sleeping by 2027.”

Miles Gibson, head of UK research at CBRE comments: “There was a proliferation of medium size proposals in today’s Budget on housing, planning, cities, business rates and infrastructure, but little radicalism to catch the eye of real estate decision makers. Nevertheless CBRE was pleased to see further action on business rates and significant spending on housing supply measures. It was refreshing to see specific acknowledgement given to build to rent development. But there was an immediate watering down of the Chancellor’s 300,000 homes a year target, announced only a few days ago. The really big Budget story, however, is the downgrading of economic growth forecasts from 2% to 1.5% in 2017 and similar downgrades for future years.”

Adam Hall, managing partner of architects Falconer Chester Hall, said: “Make no mistake: that was a budget for the development sector.

“The focus on high density urban development, particularly around transport hubs, makes absolute sense. Cities are where the jobs are created and people want to live.

“Top marks for recognising that a lot of potentially productive land is unviable because of historic contamination.

“The £1.1bn strategic sites fund is a step in the right direction, but I would have expected it to be larger. It will help councils and developers meet remediation costs and enable more urban brownfield sites to be developed. I’d expect numerous councils in the north west to be scrambling for the application rules right now.”

Your Comments

Read our comments policy here

Would be useful to read the reaction from a public sector planner or economic development officer too.

By PNW reader

Subscribe to our newsletter