Budget 2017: Chancellor promises to revive the "dream of home ownership" with housebuilding pledges
PUBLISHED: 16:43 22 November 2017 | UPDATED: 09:03 23 November 2017
Building homes for the next generation - and helping them to afford them - were at the heart of the chancellor's Budget as he announced radical changes to stamp duty and support for smaller housebuilders to end the "dominance" of national construction giants.
In a package of reforms hoped to deliver an additional 300,000 homes a year over the next decade were promises to make more land available for building, especially in urban areas, a further £15.3bn of financial support for housebuilders, and spending more on training for the construction industry.
Mr Hammond told the House of Commons he wanted young people to be able to aspire to home ownership as generations before them had done, adding: “The dream of home ownership will become a reality in this country once again.”
Norfolk housebuilders welcomed the chancoller’s recognition of “housebuilding as a top priority”.
Among the announcements on housing were:
A total of £44bn of support for capital funding, loans and guarantees of support for housebuilding to be made available over the next five years.
Immediately raising the price at which properties become eligible for stamp duty land tax (SDLT) to £300,000 for first time buyers, meaning up to 80% will now pay no SDLT at all.
Providing £34m to develop construction skills training across the country.
Increasing the Housing Infrastructure Fund by £2.7bn to invest in infrastructure to support new housing.
Creating five new garden towns with private and public capital investment in areas of acute housing pressure.
A £1.1bn land assembly fund to unlock strategic sites, managed by the Homes and Communities Agency (to be renamed Homes England).
Paul LeGrice, managing director at Abel Homes in Watton, was broadly supportive of the chancellor’s concessions targeted at SME housebuilders.
“We don’t know the detail, but it is particularly encouraging because it is the SMEs who would like to get on with building and are held back by support from banks, which still do no like lending to housebuilders in general,” he said.
“The more SMEs there are building, the more variety is given to the consumer. Rather than the market being dominated by five or six big companies, consumers can choose to deal with regional housebuilders who can react to the local market.”
Abel Homes chairman Tony Abel said: “It is nice to see the chancellor has recognised that housebuilding is the top priority for the government.”
But he added that more concessions should be made to make the process of building easier – and cheaper – for smaller builders.
The stamp duty changes also prompted positive reactions.
Martyn Baum, group residential manager at Arnolds Keys in Norwich, said: “First-time buyers are vital for the entire market, because movement at the entry-level end of things gets the whole chain moving, and impacts positively all the way to the top.
“The stamp duty measure is particularly pleasing, because it is immediate, and the benefit is explicit. We won’t have to wait to see what the impact will be – we should start seeing it straight away.”
Mr LeGrice said the changes to stamp duty would be “valuable” for first time buyers, for whom it could save to up £5,000.
“There is an issue at the bottom of the market with first time buyers not being able to afford a property. Anything that helps that has got to be supported.”
However, the Office for Budget Responsibility has suggested the move will benefit existing homeowners more than first time buyers and could push up house prices by 0.3%.
Mr Hammond also announced a review into the gap between the number of active planning permissions in the UK and housing starts, which could offer incentives to housebuilders to bring land forward for development if it finds “vitally needed land is being withheld for commercial rather than technical reasons”. An interim report will be due in time for the Spring Statement.
Norwich-based David Merrick, head of development for Savills in the East, said the length of time taken to progress sites once planning permission was achieved as a “major barrier to development”.
“If the chancellor’s commitment to local authorities translates into people on the ground processing applications, this is good news and will help speed up delivery even further,” he said.