James Parker assesses what impact the latest budget will have on housebuilding.
It’s hard to know what to make of Phillip Hammond’s Budget. There’s no doubt it contains a lot of Christmas giveaways to accelerate our struggling housing delivery.
Arguably a whopping £44bn plan has to be cause for good cheer, where his own Brexit-fuelled worries on the economy might have led to a more Scrooge-like reaction to the crisis.
I can see your but coming
As always, there’s a but.
This time it’s that the size of the plan is only evidence that the scale of the challenge of building the new target of 300,000 homes a year is as daunting as Hammond admits, and it will only go some way towards it.
Certainly many Chancellors may have been more risk-averse on borrowing at this point. His package of measures, despite its wide-ranging nature, also cued another chorus of questions on the Government’s commitment to genuinely intervene to make housebuilders and planners deliver the homes we need.
Why not just let councils work out if they can afford to do it?
And many have said that his big announcement of cutting stamp duty on the first £300,000 of house purchases will fall flat, instead having the effect of pushing up house prices. This is depressing, because it suggests that many such demand-levers will be counterproductive when it comes to fixing the demand-supply imbalance. We still need dynamic, reality-based thinking on tackling the supply side.
The Homes and Communities Agency is being beefed up in its new name Homes England to enable it do compulsory purchase on land with planning permission if it is being ‘sat on’, so that’s something. But most industry voices are still saying that the failure to tackling the log-jam in planning departments is what’s really holding everyone back.
A sacrosanct green belt
The bitter pill is that Government Ministers need to grow up and realise that the green belt is not automatically an idyllic evocation of the ‘green and pleasant land’ they sang about in school.
Actually it’s often a ring of nondescript scrub around a town – which is the most obvious place to build on. And their voters need to carefully be told to accept this.
A review of planning including ‘land-banking’ by Oliver Letwin is purely that, a review, surely we know what the problems are? If Government genuinely needs to do fact-finding on this it can only show how big the disconnect is between the DCLG and our under-resourced local planning departments.
And why avoid the real measure that would instantly catalyse housebuilding, if you want to hit 300,000 homes, namely lifting the cap on council borrowing?
Why not just let councils work out if they can afford to do it? The reclassification of housing associations as private sector bodies will give them more freedom to borrow, but as so much else in this Budget, it doesn’t go far enough.