Housing to be at heart of the Budget with pledge to build 300,000 new homes a year
Housing will be at the heart of this week’s Budget with Chancellor Philip Hammond set to get tough on developers and councils holding onto land and banks that won’t lend to small builders. Hammond wants to increase the number of homes being built a year to 300,000 and said that fixing the lack of homes on the market, including affordable homes is a top priority, with the biggest number set to be built in areas of most need.
He told the Sunday Times newspaper that the Government would do ‘whatever it takes’ to get homes built including cracking down on land banking and underwriting loans to small house builders if necessary.
He explained that there will be around £5 billion available for housing schemes and a pledge that moves will be taken to make sure the infrastructure is in place for home building. But he is not set to borrow to fund the construction of new homes.
Official figures published last week showed that more new home are being built, amounting to 217,000 more than last year but the Chancellor acknowledged that this is not enough. ‘’I’m clear that we need to get to 300,000 units a year if we are going to start to tackle the affordability problem with the additions coming in areas of high demand,’ he said in the interview.
‘We will not allow the current young generation to be the first since the Black Death not to be more prosperous than its parents’ generation. We won’t allow that to happen. Fixing the housing market is a crucial part of making sure that doesn’t happen,’ he added.
He indicated that a lot will be done to make sure big builders and councils do not hold onto land earmarked for homes with a review set to be announced into land banking and councils blocking development.
‘We are generating planning permissions at a record rate, much faster than we are generating homes. It’s house builders banking land, it’s speculators hoarding land, it’s local authorities blocking development,’ Hammond pointed out.
‘We will not be afraid to intervene to do whatever it takes to close the gap. If it’s infrastructure that’s needed to unlock housing, we’ll build the infrastructure. If it’s financial viability that’s needed, we will intervene to remediate sites and make otherwise marginally non-viable sites viable. We’ve got to make sure our banks are willing to lend to small house builders and if necessary we will stand behind that lending,’ he added.
It seems clear that Hammond has listened after a series of meetings with builders and developers, one of which was at Downing Street, who have long argued that planning, utility companies, councils, and lack of lending to small builders is holding up development.
But there was no mention of stamp duty, which the housing industry, lawyers and accountants, have been calling to be changed. Suggestions have been varied, from a temporary removal of the tax, an increase in the current minimum threshold of £125,000, no tax for retired people looking to downsize and the tax being paid by sellers rather than buyers.