Reactions to Autumn Statement:
Mac Alghita, Managing Director, Infrastructure, Arcadis, commented:
“Today’s Comprehensive Spending Review announcement brought positive news, with capital spend for Infrastructure set to increase by 50 per cent to £61bn, underpinned by a reduction in the DfT operational budget by 37 per cent. News of the largest road investment programme since the 1970s also provides certainty to the industry that the bold plans outlined by Highways England are funded and can now be delivered in full.
“The budget maintains the government’s commitment to HS2, however the £11bn funding for London simply does not go far enough. It is worrying that there was no mention of Crossrail 2, Network Rail’s CP5 programme or airport capacity in the South East. These are all essential for reducing the growing pressure on London transport while also providing key opportunities for development and regeneration across the UK. Some indication of support for these major investment programmes would have backed up the positive budgetary increases.
“Although it is likely that some of the £11bn spend committed to London will fund these schemes in part, the more pressing question that must now be asked is whether HS2 can be successful without Crossrail 2? Let’s hope there is more to come following the long awaited announcement from the Davies Commission next week and from the publication of the National Infrastructure Commission’s first report in Spring.”
Martin Bellinger, chief operating officer at Essential Living, said:
“Housing needs to be less of a political football and more about coherent long-term policies that deal with the actual issues. We’re not building enough homes because State-funded construction isn’t happening. House builders aren’t about to double their output and the hundreds of smaller developers we once had were largely killed off by the last recession.
“Starter Homes are all very well intentioned, but anyone on the ground knows that even with a 25 percent discount, buying a house for many still won’t be affordable and, even if it were, the chances are these won’t be the sorts of places we want to live. Similarly, grants for shared ownership are more tinkering around the edges.
“As a brand set up to build homes specifically for rent, we’re funded by long-term institutional money. So we take a 20-year view not a two year view as a listed housebuilder might. We’ve heard the Bank of England warn over the dangers of Britain’s debt mountain and encouraging people to buy who may not be best placed to is misjudged.
“Above all though, institutional finance is a major new source of capital which could create a huge additional supply of housing. Building for rent relieves pressure from the ownership sector and will help raise standards across the market by replacing rogue landlords and amateur investor with companies whose sole purpose is to provide housing as a service.
“For consumers, it means homes fit for purpose, economies of scale offering higher standards of living and all manner of shared spaces which mean renters can commune with their neighbours in top-floor lounges, or have a BBQ on the roof. It works like this in the US where the multifamily sector is worth trilions of dollars. Replicating this in the UK would greatly enhance the housing market for everyone.”
“Councils could land a windfall by selling off assets and pocketing the cash. But smarter local authorties could set up partnerships with developers, building homes for rent which could provide an ongoing income stream to help fund services over the long term – rather than simply an up-front cash sum.”
Local Government Association (LGA)
Responding to housing announcements in today’s Spending Review, Cllr Peter Box, LGA Housing spokesman, said:
“It is clear that tackling our housing crisis will require an increase of all types of housing, including those for affordable and social rent alongside those to support home ownership. Not everybody is ready to buy, and with 60,000 people currently living in temporary accommodation and over a million more on council waiting lists, it is crucial that councils are still able to ensure there is a mix of affordable homes right for everybody.
“Councils support measures to increase new housebuilding but, while private developers have a key role in solving our chronic housing shortage, they cannot build the 230,000 needed each year on their own.
“National housing reforms actually risk severely hampering the ability of councils to build new homes by taking £12 billion out of local investment in affordable rented housing by 2020.
“Councils need to be able to ensure genuine affordable homes continue to be built for rent and sale across the whole country for future generations and the millions of people stuck on waiting lists. This is the best way to reduce waiting lists and housing benefit, keep rents low and help more people get on the housing ladder.
“Planning is not the barrier to growth, skills are. If we are to see the homes desperately needed across the country built and jobs and apprenticeships created, councils must also be given a leading role to tackle our growing construction skills shortage. The industry is clear that skills gaps are one of the greatest barriers to building.
“Devolving careers advice, post-16 and adult skills budgets and powers to local areas would allow councils, schools, colleges and employers to work together to help unemployed residents and young people develop the vital skills to build to ensure the Government’s housing promises are met.”
House Builders Association
During the Autumn Statement 2015, Chancellor George Osborne outlined £20 billion of government expenditure with a view to boosting house building.
The statement, which is combined with the Spending Review, envisages the delivery of circa 400,000 affordable homes across several initiatives:
- 200,000 starter homes, of which 60,000 have so far been allocated funding;
- 135,000 Help To Buy: shared ownership properties for households earning less than £80,000 each year, or £90,000 in London;
- 50,000 new homes from already existing commitments;
- 10,000 new homes for people to live into at reduced rent for up to five years, while they save for a deposit and have first right to buy the home;
- 8,000 specialist homes for older citizens and people with disabilities.
The Autumn Statement also included other measures aimed at speeding up the housing delivery:
- publishing a new delivery test to ensure that local plans meet the identified housing delivery targets;
- releasing enough public sector land for 160,000 new homes;
- encouraging the regeneration of brownfield land to make place for starter homes;
- extending the £1 billion Builders Finance Fund until 2021;
- extending the Help To Buy: equity loan until 2021;
- introducing a London Help To Buy initiative, providing 5 per cent of a 40 per cent interest–free five year loan towards the purchase of a property;
- introducing an additional rate of 3 per cent of stamp duty from 1 April 2016 for additional property purchases.
Rico Wojtulewicz, policy advisor at the House Builders Association (HBA), said:
“Stimulating house building demand will prove useless, if barriers to supply remain untouched. Once again, SME house builders will be negatively affected because local authority cuts will end up hitting local planning departments. It is important to ensure the right conditions so developers can tackle the housing shortage.
“Let us not forget that decades of policies that favoured volume house builders have seen spiralling house prices, the lowest housing supply rates since the 1980s, and reduced affordability. Volume housebuilders certainly have a key role in solving the housing and infrastructure crisis, but any strategy that does not have SME house builders at its core can only hope for limited success. The HBA continues to believe that the solution to the problem lies in a shift in attitude towards SMEs, encouraging a government approach that ensures wider, more diverse market participation.
“SMEs are uniquely placed to deliver a constant and organic house building supply alongside volume housebuilders, providing a more sustainable and common-sense solution to the housing and infrastructure crisis affecting this country.”