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Housing dominates Autumn Statement and Spending Review
November 25, 2015Article by Ray Withers
Building new homes to ease Britain’s housing crisis and rebuild Britain is one of the government’s fundamental priorities. The 2015 Autumn Statement and Spending Review has emphasised that commitment by presenting what the Treasury has called “the biggest affordable housebuilding programme since the 1970s.”
A promising future
The government is, in effect, promising a rosy future of plentiful new homes and a goal of home ownership for all who want it. The chancellor has committed nearly £7 billion in order to make housebuilding a priority, doubling the budget to £2 billion per year, with a goal of delivering 400,000 new homes by the end of the decade.
The largest share (£4 billion) will be spent on 135,000 Help to Buy homes. £2.3 billion has been earmarked for starter homes, while £200 million is for 10,000 rent to save properties. £400 million has also been included for specialist homes for people with disabilities and older people. The chancellor has been clear that this is an opportunity for all.
What the figures say
Of course, many governments have pledged to tackle the lack of new homes in the UK, so what’s different about this one?
What we’re seeing with this government is a genuine, long-term commitment to building new homes that seems to have some serious substance to it. There’s more to the pledge than just political wrangling to get good headlines. House building starts were up 31% in Q1 2015, compared with the quarter before and completions were up by 10%. The figures show that the government’s approach is paying off. There’s still an awfully long way to go, but this is a positive start.
What the opposition says
Of course the opposition remains unconvinced. As shadow housing minister John Healey comments,
“If hot air built homes, then Conservative ministers would have our housing crisis sorted.”
However I remain confident that the newly committed funds will go some way to easing Britain’s desperate shortage of new homes.
Even if the numbers of new homes included in the Autumn Statement aren’t achieved within the desired timescale, a near £7 billion injection into the housing market is excellent news. It signals a strong commitment to government finally tackling the housing crisis in a realistic and sustainable manner.
The curve ball
One potential curve ball included in the Autumn Statement was the 3% increase in stamp duty on second properties, including buy-to-let properties. The move has already generated questions from landlords providing much-needed rental accommodation during these times of vastly increased demand for rental property.
Transport and housing
The other hugely relevant item of note in terms of housing in the UK was the chancellor’s announcement that construction of the HS2 high speed railway would begin, linking the Northern Powerhouse cities with the south of the country. The line is set to impact significantly on property values for those homes located within easy reach of HS2 stations.
As well as the £61 billion committed to HS2, £11 billion has also been set aside for transport infrastructure spending in London. As plans are unveiled for its distribution, local areas may well experience boosts in property values as a result.