Chancellor Phillip Hammond on Monday said that the government would contribute an additional £500m to the Housing Infrastructure Fund to “unlock” up to 650,000 new homes, and said he would extend a stamp-duty relief scheme for first-time buyers.
In the 2017 budget, Hammond announced a five-year £44bn housing programme, and abolished stamp duty for first-time buyers on properties up to £300,000.
On Monday, as part of his 2018 budget announcement, he said he would extend this scheme to all first-time buyers of shared ownership properties valued up to £500,000, and that this relief would also be applied retrospectively to any first-time buyers who made home purchases since the last budget.
About 121,000 first-time buyers have availed of this relief so far, he said. “The number of first-time buyers is at an 11-year high,” Hammond noted.
The £500m funding boost to the Housing Infrastructure Fund, a government capital grant programme, will allow local authorities to provide additional grant funding for new infrastructure, with the goal of encouraging housing development in areas of high housing demand.
Fixing the housing market, the chancellor said, was critical if the country was to resolve its productivity challenge or deliver high standards of living.
Hammond also countered the notion that big developers are hoarding land by noting the publication of a long-awaited review of build-out rates, which concluded that large house builders are “not engaged in systematic strategic land-banking.”
The review, conducted by Sir Oliver Letwin MP, made recommendations for reforms to planning laws with respect to “very large strategic housing sites.”
Russell Quirk, the CEO of online estate agent Emoov, said that to say “that the big developers are not land banking shows a completely naive disconnect from reality.”
While the UK’s 10 biggest builders hold significantly more land with planning permission than they did 20 years ago, the number of homes completed each year has fallen by around 13%.
Hammond also announced new strategic partnerships with nine housing associations, something he said would deliver 13,000 homes across England, and up to £1bn in British business bank guarantees to support the “revival of SME house builders.”
There would also be consultations on simplifying the process for the conversion of commercial properties into new homes, he said.
Hammond also announced that up to 500 neighbourhoods will be provided with funding to allocate housing to local people at a discount. “We want to see parishes and neighbourhoods enabling more homes for sale to local people to buy at prices they can afford,” he said.
While the government has spent much of 2018 pledging to fix the UK housing market, Monday’s moves were criticised in some quarters.
“As expected, the government has chosen to turn its back on addressing the current housing crisis and has instead deployed yet more cheap magic tricks and white rabbits in an attempt to divert our attention,” Quirk said.
“Retrospective stamp duty relief on shared ownership properties up to £500,000 is a very small give away and £500 million to help with an additional 650,000 homes will equate to nothing but rhetoric.”