The Autumn Statement emphasised that tackling housing is key to addressing some of the most pressing economic challenges ahead.
In a wider drive to increase national productivity, deal with imbalances across the country and prepare the economy for a potential slowdown ahead of Brexit, the Chancellor of the Exchequer announced a series of measures aimed at increasing housebuilding and supporting the delivery of new housing across a wider range of tenures.
The package announced is a step towards a better functioning housing market with support for a greater number of affordable homes, marking a clear shift away from the previous Government’s focus on homeownership.
Starter Homes, former Chancellor George Osborne’s previous flagship policy to deliver 200,000 homes aimed at first-time buyers under 40 at a discount to market value, was absent from the announcements.
Instead, we saw greater support for affordable housing. Philip Hammond’s commitment to provide an additional £1.4bn of grant funding to help support 40,000 new affordable rented homes, together with a more flexible use of existing funding for affordable housing, will enable the delivery of a wider variety of housing tenures aimed a different parts of the market.
The extra funding will add to the £4.7bn of capital grants that have already been allocated until 2021, including an unprecedented £4.1bn that had previously been aimed at delivering 135,000 new Shared Ownership homes under Osborne.
This grant funding can now be used by housing associations, local authorities and some private developers to deliver a wider range of housing types including homes to be rented at up to 80% of market value.
London, where affordability is most stretched, will benefit from £3.15bn to deliver 90,000 affordable homes by 2020/21. With housing costs at an all time high, addressing affordability issues is key to providing enough homes for London’s workers, is essential to maintaining competitiveness in the capital.
To help rebalance the country’s economy the Chancellor made a recommitment to city deals in order to support local growth and in a further boost to devolution, he announced new borrowing powers for new mayoral combined authorities in England to reflect their new responsibility.
To support new mayoral combined authorities in England, he granted them new borrowing powers to reflect their new responsibilities.
Housing and infrastructure
Some of the measures to support housing and infrastructure were wrapped in the £23bn National Productivity Investment Fund. Housing featured at the top of the list which included £7.2 billion to support the construction of new homes through the Housing Infrastructure Fund, Accelerated Construction Fund and investment in affordable housing.
This package of measures demonstrates substantial ongoing Government support for housing and house building as a key driver in the economy.
We await further details in the Housing White paper where we hope to see measures to increase supply of institutionally funded market rented homes particularly through build to rent.