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House building 'number one priority' for Hammond's budget

Tim Wallace
Philip Hammond wants to boost construction to rescue Britain's broken housing market and help would-be first time buyers - Bloomberg

House building is the “number one priority” in the Budget and the “powers of the state” will be used to force construction numbers up to 300,000 per year, the Chancellor has promised.

The green belt will stay intact but other parts of the planning system will be reformed in an effort to get more permissions granted - and to force more landowners with planning permission to get on and build.

Philip Hammond’s plans are likely to win backing from the construction sector - the bosses of Galliford Try, Mount Anvil and housing association Peabody told the Daily Telegraph they want a National Housing Fund to borrow £10bn annually for 10 years in order to build homes that are 80-90pc of market rate for sale and rent. This would allow housing associations and councils to potentially build 40,000 extra homes every year.

The Chancellor’s other plans for the Budget include schemes to boost training and skills, and to support the struggling North Sea oil and gas sector.

Too many young people are struggling to get on the housing ladder due to a shortage of homes pushing prices sky high, the Chancellor warned

“In London alone there are 270,000 residential planning permissions that have not, today, been built. We need to understand why these planning permissions, that are going up all over the country and will continue to increase across the country, why they are not being built out,” Mr Hammond told the BBC’s Marr Show.

“We will intervene to make sure that they are. We will use money, we will use the powers of the state, we will use the power of the planning system, but we are determined to get those missing homes built.”

The Chancellor said “we need small building firms in every town and city” to make sure the industry is not dominated by a handful of large companies.

“The challenge here is affordability. Experts generally agree that to start to make inroads on the affordability problem, we have got to be sustainably delivering around 300,000 homes a year on average across the housing cycle. That is a big step up from where we are now,” he said.

“It is certainly not just about pouring money in, because it you pour money in without fixing the other elements of supply, you will simply create more house price inflation which will make things worse, not better.”

And he promised to train more construction workers and support the supply chain for builders to make reduce the constraints holding the sector back.

Other training will also be on offer to support workers in the shift to new technologies.

Mr Hammond said he wants the first driverless cars to be in full operation - with nobody standing by to take over the wheel - in 2021.

“We have a huge advantage across a whole range of new technologies which will transform our lives,” he said.

“If we want to ensure prosperity in the post-Brexit world we have to embrace these, to create the high paying jobs of tomorrow.”

Mr Hammond is also expected to offer extra support to the oil and gas industry to help it cope with the fall in the oil price in recent years.

By allowing tax credits relating to the decommissioning costs of oil fields to be passed on to new owners when the field is sold, he hopes to unlock up to £40bn of new investment, he told the Sunday Times.