Housing: Steady amidst the chaos

By Raj Mandair

Amidst the Brexit chaos, Chancellor Phillip Hammond feels that he can give himself and the Government a pat on the back for their achievements on housing. Last year, housing delivery exceeded 220,000 additional homes. The proportion of first-time buyers is above 50 per cent thanks to both Help to Buy and the abolition of Stamp Duty for those looking to get their first step on the housing ladder. Despite reports about property developer Persimmon’s plentiful profits on the back of Help to Buy, there seems to be no suggestion of a u-turn or immediate review on this policy.

However, the Chancellor has seemed to ‘re-invented’ two policies.

One is the eye-catching creation of a £3 billion Affordable Homes Guarantee that will support the delivery of 30,000 homes. This is very similar to the Affordable Homes Guarantee programme, which was scrapped in 2015. Housing associations’ borrowing will be underwritten to enable them borrowing at less than 3 per cent.

The second is the energy efficiency targets for new homes. The Chancellor declared the introduction of a Future Homes Standard by 2025 in a bid to make all new-build homes ‘future-proofed with low-carbon heating and world-leading levels of energy efficiency’. Again, the announcement appears very similar to Gordon Brown’s pledge for a zero-carbon homes policy standard – and what happened with that? Well it was scrapped it in 2015 by the Conservatives, just one year before it came into force.

Yesterday, Housing Secretary James Brokenshire responded to the Letwin Review which was delivered alongside the Autumn Budget. The review argued that we could build quicker if we increased the diversity in the type and tenure of homes. Although Brokenshire announced that there will be additional planning guidance on housing diversification, it was hardly a warm embrace, as he was keen to emphasise that the revised National Planning Policy Framework (NPPF) ‘has already embedded a requirement for a greater mix of housing’. More importantly, the prospect of giving Councils stronger powers to capture land value uplift firmly remains a prospect for Government due to scepticism from the housebuilding industry.

Nevertheless, the Chancellor delivered a positive statement for London where he announced £250 million of funding for the Housing Infrastructure Fund for Old Oak Common, finally taking it out of jeopardy after its dispute with Cargiant. The funding will be used to assemble land, design and build vital infrastructure and new link roads allowing development of homes and businesses at Old Oak North, close to the new transport ‘Superhub’ where the HS2 and the Elizabeth Line will meet.

The most interesting announcement from yesterday is the update on permitted development rights. The Government will take forward a permitted development right to extend upwards certain existing buildings in commercial and residential use to deliver additional homes. It is expected that upward extensions will be covered by regulation in the autumn.

I would give the Spring Statement a C+. However, the real test is if we ever manage to build 300,000 per year.

Get in Touch

Raj Mandair

Head of Housing & Planning

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