On 13 March, Chancellor of the Exchequer Phillip Hammond delivered his annual Spring Statement to the House of Commons and vowed the government is determined to fix the broken housing market.
The annual speech offers a mini-budget, setting out the financial plans for the year, and it included some key points involving the property market. Mr Hammond promised funding for new homes, especially in key areas, support for affordable housing and small builders, and plans to introduce new planning guidelines.
Boosts to the housing supply
The government is continuing to work towards its target of having 300,000 new homes built every year in the UK by the mid-2020s, and Mr Hammond proclaimed the government is on track to reach this goal. The Chancellor stated: “Building more homes in the right places is critical to unlocking productivity growth and makes housing more affordable.”
In England, the government is guaranteeing up to £3bn of borrowing for housing associations to help the delivery of approximately 30,000 affordable homes. By having lowered borrowing costs, affordable housing providers are likely to boost their output.
Mr Hammond also revealed schemes to boost housebuilding. From the £5.5bn Housing Infrastructure Fund, £717m will be put towards unlocking up to 37,000 new-builds at sites including Old Oak Common in London, the Oxford-Cambridge Arc, and Cheshire. Money from this fund is given as grants to local authorities and is then used to provide needed infrastructure to help developers get planning permission.
An additional £445m is going to be used to unlock more than 22,000 homes in the Oxford-Cambridge Arc. In recent years, new homes have been unable to keep pace with the creation of jobs. Building more properties is expected to ease the pressures from the growing demand.
New planning guidelines and reform
The Chancellor announced plans to introduce new planning guidelines to support housing diversification, especially on larger development sites. A green paper will be published to detail proposed improvements that will focus on accelerating the planning process.
The Spring Statement also included a package of reforms allowing a greater change of use between premises, in addition to a new permitted development right for extending existing buildings upwards for new homes.
Support for small builders
The scheme supporting smaller housebuilders that was first announced in the 2018 Autumn Budget is going to be launched next month. Through the British Business Bank, the government will provide £1bn of guarantees to support lending to both small and medium-sized builders. By lowering the funding costs for these builders, the housing supply is expected to be boosted by enabling smaller scale sites to be developed.