05 December, 2016
It has been a little over a week since Phillip Hammond MP's first statement as Chancellor. Now the dust has settled, we are assessing some of the highlights relating to the UK housing sector and the reaction from those in the know.
The first thing many in the sector noticed was the big numbers - £2.3bn is to be put in a 'housing infrastructure fund' to help provide 100,000 new homes in high demand areas and £1.4bn has been offered to deliver an additional 40,000 new affordable homes by 2021. In addition, a £23bn National Productivity Investment Fund was announced, with approximately £7.2bn allocated to support the construction of new homes.
Many welcomed these announcements, including Terrie Alafat, chief executive of CIH, who said that the funds were a "significant step in the right direction" and Stephen Howlett, chief executive of Peabody said they were "encouraged by the commitment to boost productivity". However, most people were more pleased with the treasury's announcement that the restrictions on grant funding were to be relaxed.
At Forbes' packed seminar on Thursday, 24th November, all the talk was about Hammond's announcement that the above mentioned funds would be made available to build properties for affordable rent - many were concerned about SOAHP 2016-21 and the need to push home ownership initiatives. Liam Booth-Smith, chief executive of think-tank Localis, said "while the cash figure will get the headline, the bigger change is that the grant funding will come with fewer strings attached than previously."
To many people's surprise, the chancellor announced a further, albeit larger, regional Right to Buy pilot with over 3,000 tenants being eligible. Although further details are yet to be announced.
More generally, it was announced that the Universal Credit taper rate is to be cut from 65% to 63% with no further welfare savings to be announced this Parliament and, in the private sector, a ban on up-front fees charged by letting agents is to be introduced at the earliest opportunity, as there are in Scotland.