Due to the sheer size of the housing crisis we are currently facing, it was nice to see housing take a central position in Phillip Hammond’s first Autumn Budget as Chancellor.
The Government announced a new £3 billion fund to help build an extra 25’000 homes by 2020. The fund will be used to provide smaller building firms with cheap loans to help speed up construction. The Autumn Budget also included an extra £1.4 billion worth of funding to build 40’000 affordable homes throughout the country. Phillip Hammond also included £2.3 billion in aid to help provide 100’000 new homes in ‘high-demand’ areas. Those throughout the country may think that this fund will be used in London more than any other city.
Whilst these announcements are welcomed, especially by the construction industry, it barely makes a dent in the 300’000 houses per year a House of Lords committee suggested was necessary to prevent the housing crisis from worsening.
Now the big one. The Autumn Budget followed in Scotland’s footsteps and banned letting agent fees for tenants across England in Wales. The aim of this new initiative is to ease the burden on the 4.3 million private tenants across Britain. But, as Arthur discussed previously, this may in fact see tenant’s pay more de facto as Landlord’s pass on the costs via increases in rent. Letting agents are also worried, with the possibility that Landlord’s will now shop around more for agents with cheaper rates now the have to pay them.
The Autumn Budget also announced a large-scale regional pilot of the Right to Buy scheme for Housing Association tenants. The aim of this scheme is to see if it is viable to introduce a Right to Buy scheme in Housing associations as the Government aims to meet it’s deadline for a national roll-out in 5 years.
All Good News?
Chancellor Phillip Hammond said that the Autumn Budget is “a step-change in our ambition to increase the supply of homes for sale and for rent, to deliver a housing market that works for everyone.” However, not everyone agrees.
The OBR has said that housing growth has actually dropped 0.2%. This happens whilst affordable house building is at its lowest point in 24 years. One wonders whether the Government has done enough to start to reverse the housing crisis.