Autumn Budget 2018

30th October 2018
By Charlotte Yarker

Measures in the Autumn Budget to ‘fix the broken housing market’

The Government has announced a series of measures intended to stimulate house building and increase diversity in the housing market.

The British Business Bank, working with Homes England, will deliver a new scheme that provides financial guarantees to support up to £1 billion of lending to SME house builders. This is in part response to the Government’s concern that house building in the country is dominated by a small number of volume house builders, delivering a similar product.

The diversity of housing product and its role in increasing house building is a central theme in the Letwin Report, published alongside the Budget, and to which the Government will respond in the New Year. This theme has already been identified by the Mayor of London as the role of different housing products is addressed in the Draft London Plan.

As well as providing financial support for diversifying the housing market, the Housing Infrastructure Fund will increase by £500 million to a total £5.5 billion. The purpose of this is to unlock land which could deliver up to 650,000 new homes. This could include 18,000 new homes in East London owing to improvements to the Docklands Light Railway as a result of £291 million from the Housing Infrastructure Fund, funded by the National Productivity Investment Fund (NPIF).

In addition, the Government will provide £653 million to 2021-22 for strategic partnerships with nine housing associations to deliver over 13,000 homes. A new five-year strategic plan for Homes England will be published on 30 October 2018.

The Government has announced a new Help to Buy scheme from 2021 which will run for a period of two years.

The Housing Revenue Account cap that controls local authority borrowing for house building will be abolished from 29 October 2018 in England, enabling councils to increase house building to around 10,000 homes per year.

The Government has now launched its consultation on new permitted development rights to allow upwards extensions above commercial premises and residential properties, including blocks of flats, and to allow commercial buildings to be demolished and replaced with homes. Significantly greater detail is required to understand how this approach would work in practice particularly in the light of adopted development plan policies relating to employment land retention, amenity and design matters.

The government will provide £8.5 million of resource support so that up to 500 parishes can allocate or grant permission for land for homes sold at a discount. The government will reinforce planning guidance to ensure that Neighbourhood Plans are implemented as adopted. This measure emphasises the Government’s commitment to its Neighbourhood Planning agenda.

These measures demonstrate a commitment to intervene in the housing market in order to improve affordability. It is questionable to what extent these proposals will meaningfully assist with the key component of affordability, the required supply of homes.

 

 
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