Following a big Budget for housing, Dan Stern outlines key announcements.

It was no surprise that housing took centre stage in the Budget, with industry experts being led to believe in the build up that it would be a "blockbuster housing Budget". Only last week DCLG Secretary Sajid Javid said it would show “just how hard we’re willing to fight to get Britain building.” But the Chancellor waited until the end of his speech to announce that the Treasury would be investing an addition £15.3 billion in housing, bringing total funding over the next five year period to £44 billion. Clearly saving the best of his giveaways until last, he repeated the Government’s target to increase house building levels to 300,000 per year, although pushed back the timeframe for when this would be achieved to the mid-2020s.

As expected, the Budget confirmed that the Government will continue to keep strong protections for the Green Belt and focus on delivering high density regeneration in urban areas around transport hubs, with a commitment to consult on a number of measures to facilitate this.    

The headline announcement was changes to Stamp Duty, in what was a clear appeal to “generation rent”. Stamp Duty will be abolished for first time buyers purchasing properties up to £300,000 and there will also be cuts for those purchasing properties up to £500,000, resulting in savings for 95% of all first-time buyers who pay stamp duty. However, Labour contended that this would simply result in house prices being increased to accommodate this – something which may have some weight given the drop in share prices of major housebuilders as soon as this announcement was made.

The Chancellor also reeled off a series of investment packages including an additional £2.7 billion for the Housing Infrastructure Fund and £400 million for estate regeneration. An extra £8 billion of financial guarantees will also be provided to support the delivery of new homes by private housebuilders and the purpose built private rented sector. £34 million will be provided to help train a construction workforce to ensure there is building capacity to deliver the new homes promised.

The Budget confirmed the Government’s intentions to move forward with the roll out of Right-to-Buy to housing association tenants through proceeding with a £200 million pilot in the Midlands. Housing Revenue Account (HRA) caps will be lifted for local authorities in high demand areas to enable them to invest in building new homes. Local government has long called for the lifting of HRA caps but it is clear that there will be winners and losers with this policy, depending on the government’s definition of "high demand".

Picking up from the Housing White Paper earlier this year, the Government continued its focus on supporting small and medium-sized firms to compete in the housing market. A new £630 million small sites fund was announced to “unstick” the delivery of 40,000 homes and the Government will consult on local authorities being required to ensure that 20% of their housing supply is brought forward as small sites. A further £1.5 billion has been allocated to the Home Building Fund to provide targeted loans to SMEs.

The relaunch of the Homes and Communities Agency as Homes England was an interesting move. The renamed body will be tasked with taking a more interventionist role in the land market, with increased investment and planning powers, including Compulsory Purchase Order (CPO) powers. This will include a £1.1 billion land assembly fund to help unlock strategic sites. Again, the devil will be in the detail on this with no clear understanding yet on if and how Homes England would be required to work with the relevant local authorities, who obviously have their own CPO powers.

The Chancellor also announced the launch of a Review panel, led by Sir Oliver Letwin, looking into whether “land is being withheld from the market for commercial, rather than technical, reasons.” A report on this will be delivered in time for the Spring Statement in 2018. This will likely draw criticism from the sector, which has long resisted the claim that land banking is a significant hindrance to housing delivery as well as allegations that this policy has been stolen from the Labour Party, given its long-standing position on land banking.

New Town Development Corporations to oversee the creation of five new Garden Towns, which are to be delivered through public-private partnerships, were also announced, alongside housing deals in the South East, including support for 1 million new homes in the Cambridge-Milton Keynes-Oxford corridor by 2050, with 100,000 homes to be delivered in Oxfordshire by 2031.

Mr Hammond rounded off his Budget speech by saying that the Government’s plans would “revive the home-owning dream in Britain”. In a speech fronted with a gloomy economic outlook on the nation’s productivity, the announcements certainly show that the Government is coming to terms with the extent of the task facing them in meeting the country’s housing need. But with the expectation having been raised pre-Budget and the next general election taking place long before the Government’s target date of delivering the required 300,000 homes a year, the packages announced today may not prove ambitious enough and have been seen by the industry as "falling short".