Social Housing Speed Read – Housing takes centre stage in this Autumns Budget
27th November, 2017
Last Wednesday Phillip Hammond delivered his Autumn Budget with housing being a main talking point. A headline of 300,000 net new homes to be built a year by the mid 2020's was one of the key highlights.
What did the budget reveal for social housing?
The following key figures were revealed for social housing on Wednesday:
- A £44bn investment in housebuilding through capital funding, loans and guarantees over the next 5 years
- A headline statement of 300,000 new homes to be built a year by mid 2020’s
- A £1bn lift of Housing Revenue Account borrowing caps for councils in ‘high demand areas’
- An extra £2.7bn for housing infrastructure
- £125m increase over two years in Targeted Affordability Funding for Local Housing Allowance claimants in the private sector
- £400m for estate regeneration
- Funding for affordable housing units limited to £1bn extra borrowing power for local authorities to build new affordable homes
- £28m into three new ‘Housing First’ pilots in West Midlands, Manchester and Liverpool to tackle rough sleeping as part of Governments commitment to halve rough sleeping by 2022 and eliminate it by 2027
- Scrapping SDLT for first time buyers on properties worth up to £300,000
What do these announcements actually mean?
The lift on borrowing caps for some councils has been described as significant and positive. John Bibby, chief executive of the Association for Retained Council Housing, said: “We would have much preferred an overall lifting of the Housing Revenue Account debt caps but nevertheless this announcement is extremely welcome. Our concern is that the opportunity to bid is likely to be limited to councils within as yet to be defined areas of ‘high affordability pressure”.
The Office for Budget Responsibility (OBR) has raised concerns that scrapping SDLT for first time buyers will incidentally cause house prices to rise by 0.3%. The OBR also questioned the £44bn investment announcement stating that only £15.3bn of it is new money.
Gavin Smart, deputy chief executive of the Chartered Institute of Housing (CIH) welcomed the Government’s target of 300,000 new builds a year by 2020. Stewart Baseley, executive chairman of the Home Builders Federation, added: “The measures announced today will assist by stimulating demand and helping broaden the supply base of new homes. But much more needs to be done, in particular with regards to the planning system, if the target is to be met.”
Does this Budget announcement cover everything we expected?
The majority of the funding announcements focus on house building and homeownership and the Budget has been criticised for focusing on private sector development whilst lacking focus on affordability.
Brendan Sarsfield, chief executive of Peabody, which was one of many housing associations to pitch proposals to the Government for £100bn of funding to build intermediate rented housing. Although this was supported by Communities Secretary Sajid Javid in October, it was not included in the Budget.
Commenting on the same, Mick Sweeney, chief executive of Radian said “I don’t think there’s anything in terms of boosting the supply of new affordable homes, particularly. The overall problem with the budget is that the lead-up led us to believe that we were looking at fixing a broken housing market and increasing output from 200,000 to 300,000, yet there’s no long-term plan, there’s no long-term strategy”.
Stephen Teagle, director of affordable housing and regeneration at Galliford Try, shared a similar view: “While the chancellor’s opened his bag and pulled out some tools, those in themselves are not going to be sufficient to lift supply to 300,000. I don’t think it’s sufficient in affordability terms to significantly improve access to homeownership for young people.”
Many in the sector therefore feel “the Budget that truly addresses affordability will have to wait”.
If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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