Budget 2017: Infrastructure, housing, and skills receive boost

Chancellor Hammond gave his budget speech to Ministers yesterday, delivering a wide and varied speech setting out his vision for the future of Britain. Most tellingly, his budget centered around housing and making “the dream of home ownership …. a reality in this country once again.”

The housing crisis was addressed with a number of measures, legislative and funding, committing some £44Bn over the next five years. He wants to see 300,000 homes being built a year into the mid 2020s, a rate of building not seen since the 1970s, with the Help to Buy scheme continuing to support first time buyers. To support this, stamp duty has been abolished for first time buyers in homes up to £300,000.

The Chancellor acknowledged that there was no ‘magic bullet’ for the housing crisis and that simply pouring money in would not help solve the problems, so the money committed will be spread over a number of measures, including training of construction workers, releasing more land for construction, and helping more SME house builders.

Some £34M will be set aside to help train construction workers and improve construction skills, while SME house builders will be supported by a Home Builders Fund to get SME house builders building again. Mr Hammond said that reliance on the large house building companies was not good for the market, and we needed more choice in the market.

However, planning reform is required too, said Mr Hammond. He says there is a large gap between the number of permissions given and the number of homes actually built. A new review chaired by Oliver Letwin, will look at how land is being used for housing. If it finds that vitally needed land is being withheld from the market for commercial, rather than technical, reasons, Mr Hammond has promised government intervention to ensure the land is developed, using compulsory purchase orders if necessary.

“In London alone there are 270,000 empty properties” he says and more homes needed to be built in high demand areas and around transport hubs

New money will be directed to the Home Builders Fund to get SME housebuilders building again, with a further £630M small sites fund designed to unstick the delivery of 40,000 homes.

A further £2.7Bn will be invested to more than double the Housing Infrastructure Fund, with more than £400M set aside for estate regeneration.

A £1.1 billion fund will be developed to unlock strategic sites, including new settlements and urban regeneration schemes, while HRA caps will be lifted for councils in high demand areas to get them building again.

Furthermore some £8Bn of new financial guarantees will support private housebuilding and the purpose-built private rented sector.

In order to help Local Authorities and developers tackle the challenge, Mr Hammond announced that the Homes and Communities Agency will expand to become “Homes England”, bringing together money, expertise, and planning & compulsory purchase powers.

The Agency will have a clear remit to facilitate delivery of sufficient new homes, where they are most needed, to deliver a sustained improvement in affordability.

Mr Hammond then announced the support of five new locally agreed Garden Towns for areas under pressure. The projects will be delivered through public-private partnerships designed to attract long term capital investment from around the world.

The government has lent its support to the first, following the publication of the National Infrastructure Commission’s report on the Cambridge-Milton Keynes-Oxford corridor, backing its vision for one million homes by 2050. As well as completing the road and rail infrastructure to support them.

As part of this, the government has agreed an ambitious Housing Deal with Oxfordshire to deliver 100,000 homes by 2031.

Infrastructure and investment in infrastructure was also a major theme, with the chancellor reminding listeners of the government’s commitment to two of the biggest infrastructure projects in europe: HS2 and Crossrail.

Half a trillion pounds has been invested in infrastructure since 2010, with the biggest rail programme since Victorian times, the largest road building programme since the 70s and the biggest increase in science and innovation funding in four decades.

The Chancellor also marked the government’s backing of the Northern Powerhouse, the Midlands Engine, and elected mayors across the UK, with a new £1.7Bn Transforming Cities Fund. One half of the fund will be split between these cities, giving elected metro mayors powers to deliver on local transport priorities, with remainder open to competition by other cities in England.

Mr Hammond confirmed a further £300M to ensure HS2 infrastructure can accommodate future Northern Powerhouse and Midlands Engine rail improvements, whilst also committing £30M to trial new solutions designed to improve mobile and digital connectivity on trains on the TransPennine route. Some £1Bn of discounted lending will be made available to local authorities to support high value infrastructure projects, helping to support development across the country.

All this, while continuing to finance two of the largest infrastructure projects ever: Crossrail and HS2.

The budget has received mixed reviews from construction and property experts, with cautious support for the Chancellor’s measures to tackle the housing crisis, balanced against concern from larger house builders.

Image: Sovastock / Shutterstock.com

 

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