Housing was put at the heart of the British Government’s spending plans today as Chancellor Philip Hammond abolished stamp duty for first time buyers and announced billions of pounds for new home building.
More money will be poured into housing over the next five years to ensure that land is available, that small to medium sized builders can access funds, that infrastructure is in place and that homes. Including affordable homes, will be built where they are needed.
Hammond said that the bulk of the new homes will be high rise, high density developments in city centres and near transport hubs and there will also be five new garden towns funded by a combination of public and private partnerships.
The biggest group that will benefit from the announcements are first time buyers. From today there will be no stamp duty payable for first time buyers on a home up to £300,000. To ensure that this relief also helps first time buyers in very high price areas like London, it will also be available on the first £300,000 of the purchase price of properties up to £500,000.
Hammond said that this is effectively a stamp duty cut for 95% of first time buyers and that going forward 80% of first time buyers will not pay the tax.
The Chancellor promised to crackdown on developers holding onto land for home building and pledged to continue to protect the greenbelt. He also said that there will be an additional £34 million to develop construction skills across the country.
Landlords will be encouraged to offer longer tenancies and councils will be given the power to charge 100% council tax on empty homes. Hammond said he wants to ensure that councils in high demand areas permit more homes for local first time buyers and affordable renters.
Some one million homes will be built on the Cambridge, Milton Keynes, Oxford corridor by 2050 as part of a plan to create what Hammond called ‘a dynamic new growth corridor for the 21st century’.
‘Over the next five years we will commit a total of at least £44 billion capital funding, loans and guarantees to support out housing market to boost the supply of skills, resources and building land and to create the financial incentives to deliver 300,000 net additional homes a year on average by the mid 2020s. This is the biggest annual increase in housing supply since 1970,’ he told the House of Commons.
The details revealed include £1.5 billion for SME builders as Hammond said he wants to end the dominance of large builders, a £630 million small sites fund to unstick the delivery of 40,000 homes, and a further £2.7 billion to more than double the Housing Infrastructure Fund.
He announced £400 million for estate regeneration, a £1.1 billion fund to unlock strategic sites, including new settlements and urban regeneration schemes, a lifting of HRA caps for councils in high demand areas to get them building again and £8 billion of new financial guarantees to support private house building and the purpose-built private rented sector.
Hammond has ordered an urgent review of what he called ‘a significant gap’ between the number of planning permission granted and the number of homes actually being built. He said in his speech that in London alone there are 270,000 residential planning permissions unbuilt.
He said an interim report will be delivered before the Spring Budget in March 2018 and promised to take action if necessary. ‘If it finds that vitally needed land is being withheld from the market for commercial, rather than technical, reason we will intervene to change the incentives to ensure such land is brought forward for development using direct intervention compulsory purchase powers as necessary.
He also announced that the Homes and Communities Agency will expand to become Homes England to bring together money, expertise, and planning and compulsory purchase powers with a clear remit to facilitate delivery of sufficient new homes where they are most needed and to deliver a sustained improvement in affordability.
‘When we say we will revive the home owning dream in Britain we mean it. We do not underestimate the scale of the challenge. But today, we have made a substantial down payment,’ he concluded.