What the Spring Statement 2019 means for housing: £3 billion Affordable Homes Guarantee Scheme and a move away from fossil-fuels in new builds
In a spring statement that was widely mired in Brexit uncertainty, housing was one area where Philip Hammond made some concrete pledges – albeit of a modest nature.
The government will guarantee up to £3 billion of borrowing by housing associations in England to support delivery of 30,000 new homes through an Affordable Homes Guarantee Scheme.
Old Oak Common, already set to become a huge new transport hub in west London, was one of four areas pinpointed to get £717 million from the £5.5 billion Housing Infrastructure Fund.
Along with Didcot and Cambridge at either end of the Oxford-Cambridge Arc, and Cheshire in the North West, the money will be used to build up to 37,000 homes across the four sites.
The Chancellor said this would put the UK on track to raise housing supply to its highest level since 1970 by the end of the current Parliament and to reach 300,000 new homes a year by the mid-2020s, up from the current figure of 220,000 cited by Mr Hammond.
“The £3 billion allocated to the Affordable Homes Guarantees Programme will enable Affordable Housing providers to boost their output by reducing their cost of borrowing,” said Patrick Gower, residential research associate at Knight Frank.
“The funding is welcome, because the government must look to a diverse range of housing providers if its ambitious target of 300,000 additional homes every year is to be met. This means looking not just to the volume housebuilders, who provide a significant amount of the country’s housing supply already, but also to Affordable Housing providers and developers of alternative tenures, such as Build to Rent, student housing and senior living.”
‘Simply isn’t enough to fix the broken housing market’
However, there was scepticism among some housing commentators over how great an impact the policies announced today are likely to have.
Mark Hayward, Chief Executive, NAEA Propertymark said: “We support anything which serves to increase the supply of housing stock and improve accessibility for first-time buyers who have been increasingly priced out of the market over the last five years.
“Demand for housing continues to rise, and the number of new homes currently being built isn’t enough to fill this void.
“However, in terms of annual transactions, 30,000 affordable homes simply isn’t enough to fix the broken housing market. More needs to be done.”
Jeremy Leaf, a former RICS chairman said: “Anything which improves the supply of affordable housing is to be welcomed but we have heard it all before. We want to see a timetable for delivery, which will keep prices in check and meet demand irrespective of political and economic uncertainty, rather than just empty promises.”
Nick Sanderson, CEO of the Audley Group said the government’s continued focus on building new homes was the wrong approach for fixing the affordable housing crisis.
“After years and years of incentives to support younger buyers it should be clear by now that the housing market is still broken. The incentives, and endless building promises, have not worked,” he said.
“We need to know what houses to build, and how to incentivise those living in unsuitable housing to move.”
Environmentally friendly new build homes
As part of his Clean Growth strategy, the Chancellor also announced plans to make homes better for the environment.
The government will introduce a Future Homes Standard by 2025.
This will require new-build homes to be future-proofed with low-carbon heating and energy efficiency.