The Chancellor of Exchequer Phillip Hammond delivered his Autumn Statement in his first budget speech since taking office in July.
Hammond will be injecting over £4bn into housebuilding and infrastructure, and will release over £3bn for the creation of thousands of affordable homes in London. The new funding will be in addition to the £4.7bn already allocated for housebuilding (comprising the £3bn Home Building Fund and the £1.7bn Accelerated Construction Fund) that was announced by the chancellor and the homes and communities secretary Sajid Javid in October.
The chancellor is also set to ban letting agency fees, reduce the Universal Credit taper rate from 65 per cent of the payment to 65 per cent (saving claimants 2p for every extra pound earned) and raise the Living Wage from £7.20 to £7.50 in April.
New funding and relaxed borrowing restrictions
- a £2.3bn housing infrastructure fund to unlock land for housing and deliver infrastructure for up to 100,000 new homes in areas of high demand
- a £1.4bn affordable housing fund to deliver 40,000 additional affordable homes
- £3.15bn for 90,000 affordable homes in London
- Ban of letting agency fees “as soon as possible”
The chancellor also promised he will relax restrictions on government grants to allow providers to deliver a wider range of housing types, and a “large scale regional pilot” of Voluntary Right to Buy for housing association tenants. He highlighted a continued support for home ownership will remain available through Help to Buy and Help to Buy ISA schemes.
David Cox, Managing Director, Association of Residential Letting Agents (ARLA):
“A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market. This decision is a crowd-pleaser, which will not help renters in the long-term.
“Most letting agents do not profit from fees. Our research shows that the average fee charged by ARLA Licenced agents is £202 per tenant. If fees are banned, these costs will be passed on to landlords, who will need to recoup the costs elsewhere, inevitably through higher rents.”
Shelter policy officer Kate Webb wrote a blog about the ban on letting agency fees:
“We are truly delighted the government is bringing forward a ban. Because tenants have so little consumer power we have never believed transparency will be sufficient to end abuses.
“A ban on fees is the fairest, most transparent way to improve private renting for just managing families and we are delighted the government agrees.” (Full statement available here)
Richard Lambert, Chief Executive Officer at the National Landlords Association (NLA):
“There’s no doubt that some unscrupulous agents have got away with excessive fees and double-charging landlords and tenants for far too long. Banning letting agent fees will be welcomed by private tenants, at least in the short-term, because they won’t realise that it will boomerang back on them.
“Agents will have no other option than to shift the fees on to landlords, which many will argue is more appropriate, since the landlord employs the agent. But adding to landlords’ costs, on top of restricting their ability to deduct their business costs from their taxable income, will only push more towards increasing rents”.
Lord Porter, Chairman of the Local Government Association (LGA):
“Councils, the NHS, charities and care providers have been clear about the desperate need for the Chancellor to take action to tackle the funding crisis in social care. It is unacceptable that this has not been addressed in the Autumn Statement. The Government must take urgent action to properly fund social care if councils are to stand any chance of protecting the services which care for the elderly and vulnerable.
“It is good news for local government that the Autumn Statement has accepted our call for measures to boost affordable housebuilding, which must be supported by adequate infrastructure, and which help councils tackle some of the nation’s roads repair backlog and improve broadband. (Full statement available here)
Mayor of London Sadiq Khan welcomed the £3.15bn deal:
“I’m delighted that we today took the first steps towards a major new devolution deal for London. London has a bigger population than Scotland, Wales and Northern Ireland combined, but we have far less control over how our city is run.
“The record-breaking affordable housing settlement means we can get on with the hard slog of building new genuinely affordable homes, but it won’t happen overnight – fixing the housing crisis will be a marathon and not a sprint.”
Terrie Alafat CBE, chief executive of the Chartered Institute of Housing (CIH):
“Given the scale of our housing crisis the central focus on housing in the government’s Autumn Statement today is a significant step in the right direction. 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.” (See full statement)
Alafat added CIH also wanted to see more funding to support social rents and a rethink of the welfare measures but added the scaling back of the universal credit cut was “a positive step”.
David Orr, Chief Executive of the National Housing Federation said housing associations are ready “to step up and deliver”:
“Housing associations have made a compelling offer to the Government and to the nation.
We have said that we will stretch our resources as far as we can to deliver all this so that the nation gets from where we are now to the 250,000 new homes a year we need. And we have said that we have the capacity to do much more if the Government…increase public investment in delivering new homes and give us…flexibility to provide the tenure mix we need in the places where we work.”
“Today the Chancellor has agreed with us. There is more money and a commitment to real flexibility in what we build and what we offer. Housing associations are, and indeed must be, ready to step up and deliver.” (Read his full statement)
Kate Bailey, chair of Policy and Communications Committee at the Landscape Institute:
“It is commendable that the Government is to fund delivery of new housing infrastructure and more affordable housing, but housing quantity cannot be divorced from housing quality.
“The UK features many poorly-designed housing estates and I believe that a landscape-led approach is critical in increasing the supply of high quality ‘liveable’ housing. It will help make developments more acceptable to existing and future residents and will be a positive evolution in the way we plan and deliver new communities with sustainable lifestyles fit for the 21st century.” (Full statement)
Julia Evans, BSRIA Chief Executive:
“ announcements on housing, innovation and regional and local infrastructure will help business across the UK to invest with greater confidence for the long-term which is welcomed by BSRIA. However, it was disappointing to see no mention of the environment.
“The Chancellor’s strong emphasis on the development needs of our cities, regions and nations is a confident and helpful step that sends out the right message for members and the industry based at all points across the country.”
David Hawkes, CIOB Policy Manager:
The CIOB welcomes the Chancellor’s announcement to commit greater levels of investment in the built environment, as well as further funding for improving productivity and innovation.”
“In construction, we know what can be done to improve productivity, but require certainty for firms to invest in innovation, skills and training in order to support it. For this reason, we welcome the £23bn National Productivity Investment Fund, to be spent on improving innovation and infrastructure over the next five years.
“We are also pleased to see the £13 million support to help businesses improve managerial skills, but await further details on eligibility and distribution.”
Keith Aldis, CEO of the Brick Development Association:
“For the construction industry, what is important is that the Chancellor breathes life into a turbulent sector. The Brick Development Association welcomes the news that major infrastructure investment will continue.
“We are also happy to see that Government is addressing the issue of affordability in the interim period, and not simply waiting for supply to balance demand.”
Stephen Radley, Director of Policy at CITB, said:
“Today’s announcements offer more certainty for the pipeline of work ahead, not just nationally but at a regional and local level in infrastructure and housing.
“This will help to boost business confidence following the uncertainties thrown up by Brexit. The local and regional investment should help bring more small firms into the supply chain, where much of the training takes place.”
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 that reason, the £1.4 billion announced for 40,000 affordable homes is welcome, as is the £1.3 billion for roads – the latter will help improve the UK’s infrastructure and make our economy more competitive.”
“The £2.3 billion Housing Infrastructure Fund is welcome and could go some way to solving the housing crisis. 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.
“The Chancellor wants a ‘housing market that works for everyone’ and central to this is empowering small local house builders. We look forward to the Government’s forthcoming Housing White Paper which we hope will include further interventions to boost housing delivery through SME house builders, including a presumption in favour of smaller scale developments.”
Jeremy Blackburn, Royal Institution of Chartered Surveyors (RICS) Head of Policy said:
“The Private Rented Sector became a scape goat under the previous Chancellor. Now it seems that through the relaxation on grants to deliver a wider range of housing types, Hammond will drive an affordable rental agenda and can get Britain building in a way that benefits a cross section of society, not just the fortunate few.
“Opening up Right To Buy for housing association tenants certainly has potential, and it is sensible that this is being trialled by pilot. However, we must ensure that mechanisms for replacing all sold stock are thoroughly tested in order to protect our most vulnerable.
On letting agency fees:
“Government must strike the right balance between allowing credible, regulated letting agencies to recover reasonable costs and the unquestionable need to protect tenants from suffering excessive charges by less scrupulous agents.”
Last updated: 24 Nov 16:50 GMT