Autumn Statement: Hammond commits £3.7bn for housing

The Chancellor announces a £1.4bn multi-tenure grant to build more homes, also relaxing rules on what homes can be built with the money.


Philip Hammond has used the Autumn Statement to give housing a new boost – with affordable homes for rent back on the agenda.

A £1.4bn injection will aim to build 40,000 affordable homes and the sector has already welcomed the move.

But critically, the sector has been given the green light on flexability, with the chancellor stating he will “lift the restrictions” on what type of homes can be built.

This follows on from communities secretary Savid Javid saying at the recent National Housing Federation event in Westminster progress was likely in enabling housing associations to increase supply.

There is also an extra £2.3bn infrastructure funding for housing in high demand areas.

There was also a pot of £4.8bn for a National Affordable Housing Programme, of which, £3.5bn will go to London. This is hoping to build 90,000 homes.

The chancellor also said there will be a large scale regional pilot for Right to Buy housing association tenants, not the blanket rollout in the manifesto just over a year ago. It is thought the Right to Buy is not being scrapped but merely delayed as regulations are thought out.

In the supporting Autumn Statement documents, it is stated: “The government will fund a large-scale regional pilot of the Right to Buy for housing association tenants. Over 3,000 tenants will be able to buy their own home with Right to Buy discounts under the pilot.”

There was also some support for Help to Buy, with the chancellor saying they will give the policy “additional support.”

Also in the Autumn Statement, the chancellor has banned letting agents fees, as reported by 24housing yesterday.

He also made changes to Universal Credit, with claimants losing 63p for every £1 they earn, rather than 65p, saying “this will help three million households across the country.”

The chancellor also noted there would be no more welfare savings introduced, with the ones already introduced and being implemented being enough.

Terrie Alafat CBE, chief executive of the Chartered Institute of Housing, said: “The measures announced today demonstrate this is a government which recognises housing is a key part of our infrastructure and that it brings economic benefits. It also shows this is a government which is serious about its commitment to help the many thousands of people struggling to get access to a decent, affordable home.

“The extra investment to support the building of 40,000 new affordable homes and the greater flexibility in funding for housing providers to build homes of all tenures, both of which we had asked for, are particularly welcome. It is also pleasing to see largescale investment in infrastructure to support new house building.

“We would, however, have liked to see more to support people who need housing the most, with more funding diverted specifically to support social rents and a strategic rethink on welfare measures we believe make housing inaccessible to a significant number of individuals and families.”

David Orr, chief executive at the National Housing Federation, said: “We have been calling on the government to relax restrictions on existing affordable housing funding, so we are delighted with this announcement.

“Increased flexibility and extra investment will give housing associations the freedom and confidence to build even more affordable homes, including for rent, more quickly across the country.

“The decision to change the tapers in Universal Credit is welcome and a positive move for households which are just about managing. However, we will be raising our concerns with government about the changes to the Local Housing Allowance cap for those receiving Universal Credit from 2019.

“We look forward to working with government and our members to develop a regional Voluntary Right to Buy pilot that works for housing associations and their tenants.”

Hugh Broadbent, National Federation of ALMOs Chair, says: “Today’s Statement is a step in the right direction. However we believe that this is only the first step in addressing the very real needs of our communities across the country.

“The NFA and its members look forward to continuing to work with the government on developing their ideas in the future around how best to meet the ever-growing need for truly affordable housing in this country.”

Labour’s shadow secretary of state for housing, John Healey MP, said: “Six years of Conservative housing policy has led to the lowest level of new affordable housebuilding in 24 years. Today’s announcement is too little and too late.

“Too little to make good the huge cuts in housing investment from 2010, still half the level left by Labour. The reality is ministers’ deep cuts have left a funding shortfall of over £17bn compared to the plans I left as Labour’s last housing minister. Today’s announcement doesn’t even make up a tenth of that.

“Too late to rescue failed flagship policies like stalled starter homes, announced two years ago but not a single one built.

“The government have no long term plan to fix the housing crisis and if they’re serious about trying they should back Labour’s plans to build tens of thousands more affordable homes to rent and buy each year.”

Sarah McMonagle, Director of External Affairs at the FMB, said: “The Chancellor’s commitment to double annual capital spending on housing by 2020 demonstrates that he understands that house building and economic growth are intrinsically linked.

“For every £1 invested in construction, £2.84 is generated in the wider economy and therefore the best way to protect ourselves from an economic wobble as we leave the EU is to invest in our built environment.

“The burden of funding local infrastructure for new homes should not fall entirely on private house builders – however, as council budgets have been stripped back, local authorities have increasingly looked to developers, including even the very smallest developers, to plug these funding gaps.

“Heavy demands for Section 106 and Community Infrastructure Levy can make many small developments unviable. Key to the Fund’s success will be to ensure that it focuses on unlocking large numbers of small sites and not just small numbers of large sites.”

Liam Booth-Smith, chief executive of Localis, said: “The £1.4bn injection into the Affordable Homes Programme is good news. Housing associations, developers and councils will be able to bid for a larger pot of money to fund new affordable housing.

“Whilst the cash figure will get the headline, the bigger change is that the grant funding will come with fewer strings attached than previously. Bidders will be able to use it to build homes for affordable rent, not just shared ownership and Rent to Buy as was the case in the previous prospectus.”

Campbell Robb, Shelter’s chief executive, said: “This extra investment will be welcome news for many of the ‘just about managing’ families crying out for homes that are genuinely affordable. It’s promising to see restrictions on funding relaxed, which should help to build the homes that those struggling actually need – including affordable homes to rent.

“As always the devil will be in the detail, and we looking forward to working with the government to make sure that this funding helps provide homes for those struggling with high housing costs right across the country.”

Labour’s London Assembly housing spokesperson, Tom Copley AM, said: “The move to funding affordable rent as well as shared ownership is a welcome recognition from government that their failed Starter Homes policy was neither affordable nor fit for purpose in the capital.

“London needs genuinely affordable homes, and we now need an assurance that a significant number of these homes will be pegged at the social rent level London needs most acutely.

“If the government are really serious about tackling the housing crisis, this money needs to be followed by far greater powers over housing and planning for London. Most importantly we need a lift on council borrowing restrictions to allow them to build more new council housing, and ‘use it or lose it’ powers for the mayor to wield when developers have planning permission but don’t build the homes.”

Matthew Kennedy, policy and public affairs manager at the Chartered Institute of Housing Cymru commented: “It has never been more important to invest in housing and recognise its role as a fundamental piece of infrastructure. We welcome the extra £400million realised for Wales in today’s autumn statement.

“Despite the announcements made by the Chancellor on an increase in the national living wage and a reduction in the earnings taper for universal credit, the welfare changes being implemented such as the cap on housing benefits at local housing allowance rates will have a detrimental impact on thousands of families in Wales.

“Combined with the considerable fall in resources available for housing-led community regeneration within Welsh Government’s own budget it combines to paint a worrying picture for the prosperity of Welsh communities and individual wellbeing.”

Mary Taylor, Chief Executive of the SFHA, said: “Whilst the modest reduction in the Universal Credit taper rate is welcome to anyone claiming or receiving Universal Credit, it is important to note that the Autumn Statement came immediately after the announcement of further damaging changes.

“Vulnerable tenants are paying the price of the UK Government’s failure to invest in social housing particularly in England, which has contributed to the housing benefit bill growing out of control with more tenants living in more expensive private accommodation.

“As well as the concerns we have previously articulated about funding supported housing, we will be particularly anxious about the future for the 11,000 single tenants under-35 living in housing association accommodation reliant on Housing Benefit.”

Nicola McCrudden, Chartered Institute of Housing (CIH) director for Northern Ireland, said: “We know that letting agent fees are simply too high for many people. Removing that barrier will make it easier for them to get access to a home.

“As 20% of households in Northern Ireland rent privately, the issue of letting fees and indeed the regulation of letting agents needs further consideration. CIH in Northern Ireland is supportive of a mandatory licensing system which would go a long way to addressing poor practice.”

(Note: The ban to letting agents fees are England-only. CIH NI is calling for legislation that currently exists to be revisited.)

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