On 29 October 2018 the Chancellor delivered his speech summarising his plans for the UK’s housing budget in the upcoming future. The announcements have the potential to provide an additional 9000 homes in the next few years. This article summarises the key points of interest for the sector.
- £1.7 billion will be made available in Universal Credit work allowances.
The universal credit system will be reshaped, with the introduction of £1.7 billion extra universal credit work allowances, as well as an additional £1billion that will be provided throughout the next 5 years for those individuals moving on to universal credit from other benefits. These changes will allow people to earn more from the welfare system without having their benefits cut.
- The Help to Buy scheme will be extended by 2 years.
The Help to Buy scheme provides a 20% government loan towards new build properties for first time buyers, therefore it’s extension to 2023, which will make it available for an extra two years, is a promising change for first time buyers. An additional change introduced in the most recent budget, is the removal of stamp duty on shared ownership properties when buying between 25% and 75% of a house. Both of these changes have been praised as positively benefiting first time buyers and therefore continuing to increase the number of first time buyers, potentially surpassing the current 11 year high.
- Local authority borrowing caps will be lifted and an extra £500 million will be made available for the Housing Infrastructure Fund.
Mr Hammond announced an extra £500 million for the Housing Infrastructure Fund. This increase is expected to provide 650,000 more homes, since it offers councils the opportunity to access extra funding for house building. Local authority borrowing caps will also be lifted following the Chancellors announcements, a change which has already been utilised by 60 local authorities as an opportunity to access additional funding for housing provision.
- Additional fund availability of £675 million to help councils convert commercial, unused property into residential units.
The Chancellor announced that the housing sector will be provided with an extra £675 million to help councils convert commercial, unused property into residential units, with the hope of removing ‘wasted space’. The aim of the strategy is to transform main retail zones and adapt high streets to help them to remain as a key part of community life. It was also announced that the council will discuss possible solutions to simplify the planning process when converting commercial property to residential units.
- Strategic Partnerships set up with nine housing associations will deliver 13,000 homes.
In his speech, the chancellor announced that he has allocated £653 million to nine housing associations in the Affordable Homes Programme, financing the construction of 13,000 homes. The programme and partnerships will run until 2021/22, where a subsequent follow-up programme will then be implemented in 2028/29.
- Bank guarantees for SME house builders.
The government has committed to supporting small-scale builders by pledging £1 billion of bank loans to SME house builders. This coincides with the governments’ commitment to supporting the deliverance of a more diverse housing market, because the funding will provide small-scale builders with access to new funding opportunities, which will in turn create more diversity of tenure.
- Funding provided to allow discounted house sales to those in perpetuity.
Finally, the Chancellor announced that he wanted to provide housing at prices that were affordable for local people. Therefore, he will provide 500 neighbourhoods with land that will allow homes to be sold at a discounted rate to local people in perpetuity.
Some may argue that the autumn budget offers many solutions for the housing sector, not only to allow the provision of more housing stock but also to ensure that properties are made affordable and accessible for first time buyers. However, despite many of the announcements being praised for their potential positive impacts on the housing sector, the National Housing Federation, stated that they were disappointed with the announcements, with a significant failure to address information related to potential land market changes. Kate Henderson, Chief Executive of the National Housing Federation expressed her disappointment in the announcements, stating that they were ‘not the wholesale changes needed to fix our broken housing market.’
Pennington Choices understands the struggles the housing sector is currently facing and can provide Registered Providers with property advice in light of future market uncertainty. With significant client and contractor experience and practical hands-on experience, we bring an informed perspective of your housing needs. Contact Jenny Neville to find out how our consultancy experts can help your organisation.Back to blog