Spring Statement: Chancellor pledges more money for housing

Last week’s Spring Statement went largely under the radar, with political coverage focused on the key  Brexit votes in the House of Commons, however Chancellor of the Exchequer Philip Hammond made some important announcements about housing.

Most notable in the Statement was the Chancellor’s commitment to £3 billion of loans to housing associations in “a new Affordable Homes Guarantee scheme, to support delivery of around 30,000 affordable homes.”

This money will come from the £8 billion of housing guarantees the Chancellor announced in his 2017 Autumn Budget. The scheme will soon be open for bids from housing associations.

A further £1 billion from the overall £8 billion will be made available to small and medium enterprise (SME) housebuilders in the private sector – as first announced by the Chancellor in last year’s Budget –  to be launched in April 2019.

Further funding will be put towards unlocking large housing sites, with £717 million targeted towards infrastructure funding. The Ministry of Housing, Communities and Local Government announced in a press release accompanying the Spring Statement that a new ‘Accelerated Planning Green Paper’ would be published. MHCLG said that the new Green paper would:

“accelerate the planning process for new homes – from when ideas are still on the architect’s drawing board and well before shovels hit the ground.”

The Green Paper will carry on from the work of the Letwin Review of buildout rates, incorporating many of its recommendations.

The Chancellor’s Spring Statement further committed the Government to ensuring new-builds are more energy efficient, and help the country meet climate change targets – with the introduction of a ‘Future Homes Standard’, mandating the end of fossil-fuel heating systems in all new houses from 2025.

Commenting on the Statement, Secretary of State for Housing, Communities and Local Government James Brokenshire said:

“We’re pulling all the levers available to build homes and opportunities in our communities.

“These new measures and funding mark our continued commitment to ensuring the housing market works for everyone and economic growth is shared across the country.”

These measures will come as good news for the housing sector, with the Chancellor repeating the Government’s mantra that they are on track to achieving 300,00 new homes per year by the mid-2020s; however the spectre of Brexit loomed large within the Statement. Philip Hammond was clear that the plans announced in the Statement would be put off course in the event of a no-deal Brexit, telling fellow MPs:

“I need to be straight with the House: a no-deal Brexit would deliver a significant short- to medium-term reduction in the productive capacity of the British economy.

And because our economy is operating at or near full capacity, any fiscal and monetary response would have to be carefully calibrated not to simply cause inflation…”

With Mrs May’s deal being voted down in the House of Commons last week, and no end to the Brexit saga in sight, the housing market will still be in search of the certainty it craves.

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