It is somewhat hard to know what to make of Phillip ‘joker’ Hammond’s recent Budget, given that it contains a lot for housing, as rumoured, and perhaps more than some feared, while at the same time raising yet more questions on the Government’s commitment to genuinely intervene to fix the supply problem.
There is no doubt that with the public finances still strapped, and this Remainer Chancellor notoriously Brexit- wary, we should cheer the fact that the Treasury are prepared to find £44bn for housebuilding “funding, loans and guarantees,” but what does this mean in practice? A fairly universal reaction to the cut in stamp duty for first-time buyers has been that it will in fact push house prices upwards, but will loans make a more positive difference? For example, SME housebuilders will get £1.5bn extra Home Builders Fund cash, but how quickly?
The Homes and Communities Agency is being beefed up in its new guise Homes England, including powers to compulsorily purchase land with planning permission to enforce the building of homes. However there was little other sign of planning issues being unravelled in the Budget, to see why the UK has so much land which is ready to build out, but which lacks the infrastructure or the will from major housebuilders to so do.
The problems in planning are well known, but what we have now is Tory heavyweight Oliver Letwin chairing a review of alleged land banking and other planning issues. The mere sound of the word ‘review’ sounds like reticence rather than action. The fact the Government needs to fact-find here is only too indicative of how little tie-in there is between the DCLG and our under-resourced local planning departments.
It is time that everyone in power acknowledged that the green belt is often not some sacred, ‘Jerusalem’-evoking ‘green and pleasant land’, but is highly likely to be a nondescript ring of land around a town which might often be the best place to build on.
Another major omission in the Budget was the deferral of lifting the cap on council borrowing to build homes – its two year delay seeing criticism from architectural thought-leaders such as Ben Derbyshire. Surely it should simply be left up to councils to decide whether they can afford it? The reclassification of housing associations as private sector bodies should however offer the freedom for them to pursue the loans, as the largest providers of public rented housing currently, and build where and how they need to.
The announcement of new money was designed to raise a cheer in the gloomy context of economic growth prospects being revised down for the UK for the next five years, due to continuing productivity problems. Next time Hammond will have little room to work with next time if, as he secretly suspects, Brexit uncertainty causes an economic downturn short-term.
A note of optimism was heard on Brexit recently, from one very upbeat panellist at a National Federation of Builders event. The industry should benefit from opportunities offered by the Chancellor’s £3bn put aside to ‘prepare for Brexit,’ he said. Building lorry parks along Kent motorways might be on offer. If that’s not a tantalising glimpse of future prosperity,
I don’t know what is.