When all is said and done, it all comes down to Brexit. The chancellor ‘Spreadsheet Phil’, as his colleagues none-too-affectionately call him, has his hands effectively tied until the government decides how they are going to extricate the country from the European Union.
On many of the major sectors of the economy – housing included – all cabinet ministers can do is tinker round the edges. Governments in recent decades have become adept at tinkering around the edges of housebuilding; it is pretty much all they have really done since the last great wave of last century.
In reality, the chancellor Philip Hammond was always going to be the story of this autumn budget whatever he said at the dispatch box this week. If this is to be his last time he gets to be the centre of attention by waving around a little red briefcase at photographers, then he did about as well as could be expected given his lack of room in which to wiggle. Perhaps, in hindsight, he had already done all his wiggling earlier this week with the announcement by the Office for National Statistics that it would reclassify housing associations as private bodies to get £60 billion of debt off the public books.
Even though the speech focused on housing, some of his biggest manoeuvres were swiftly put down by a combination of the stock market and the Office for Budget Responsibility. Moving the stamp duty threshold to £300,000 would see prices increase and ‘mainly benefit property owners’, warned the OBR. These pesky independent analysts also refused to lift their predictions of new homebuilding despite Mr Hammond’s announcement of £15.3 billion (in total £44 billion) being provided explicitly for that purpose. And the announcement that housebuilding companies accused of landbanking will be subject to not only an official review but also potential intervention saw their shares tumble.
However, Mr Hammond received a softer landing from the industry itself. The National Housing Federation praised a ‘good signal of intent’ but urged ministers to make more land available for building. The Chartered Institute of Housing welcomed the ‘ambitious new target’ of 300,000 new homes per year and pushed for more social rented accommodation. The LGA asked for more powers to be devolved to councils while the Home Builders Federation said the Budget would help stimulate demand but added that ‘more needs to be done’.
But what though? Short of locking up his Cabinet adversaries and most national press proprietors, throwing hundreds of billions of pounds into construction projects and sending a pleading letter to Brussels withdrawing the UK’s triggering of Article 50, it is hard to see what Mr Hammond could do to resolve his problems. To paraphrase former US president Bill Clinton: ‘It’s Brexit, stupid.’
The housing Budget at a glance:
- £15.3 billion in new financial support for house building over the next five years, taking the total to at least £44 billion. This includes £1.2 billion for the government to buy land to build more homes, and £2.7 billion for infrastructure that will support housing, £8 billion to support private housebuilding and the purpose built private rented sector
- Stamp duty threshold for first time buyers to move to £300k. The first £300,000 on properties worth up to £500k will also be scrapped
- Pledge to create five new garden towns
- £1.5bn to speed up the payment of Universal Credit to claimants with special flexibility for claimants on housing benefit
- Right to buy for housing association tenants to go ahead with a one-year £85 million pilot from July 2018 in the West Midlands.
- Council borrowing caps in “high-demand areas” to be lifted
- An extra £125m to help private sector tenants struggling to pay their rents
- New money into Home Builders Fund
- Extra £2.7bn for Housing Infrastructure Fund
- A total of £300m for estate regeneration
- £1.1bn on unlocking strategic housebuilding sites
- Three new Housing First pilots announced for West Midlands, Manchester and Liverpool, a total of £28m
- Councils to be given the power to charge 100% council tax premium on empty properties
- A consultation to barriers to longer tenancies in the private rented sector
- £38m for Kensington & Chelsea Council for mental health and counselling services,
regeneration projects in areas surrounding Grenfell Tower and a new community space
- £125m increase in Targeted Affordability Funding for Local Housing Allowance claimants in the private sector struggling to pay rent