Here’s a round-up of how the Spring Statement impacts the property market.
Chancellor Philip Hammond delivered the 2019 Spring Statement in the House of Commons on Wednesday. We've sifted through the detail and picked out the main announcements that impact housing.
1. Funding for 37,000 new homes
Hammond announced plans to use £717m from the £5.5bn Housing Infrastructure Fund to unlock up to 37,000 new-build properties at sites including Old Oak Common in London, Didcot, Cambridge and Cheshire.
Money from the fund is given out to local authorities in the form of a grant and is used to provide the infrastructure that is needed to enable developers to get planning permission for sites.
While the funding is good news for these communities, it is likely to be a while before it leads to new-build homes becoming available to buy or rent, as the money is used at the very start of the development process.
2. Support for 30,000 affordable homes
The Government will guarantee up to £3bn of borrowing by housing associations in England to support the delivery of around 30,000 affordable homes.
The money, available via the Affordable Homes Guarantee Scheme, should enable affordable housing providers to boost their output through lower borrowing costs.
While the move is obviously good news for the affordable homes sector, the 30,000 properties the scheme will help to deliver is only a fraction of the Government’s target of having 300,000 new properties built across the UK every year.
3. More properties for Oxford-Cambridge Arc
A further £445m is being unlocked from the Housing Infrastructure Fund to unlock more than 22,000 homes in the Oxford-Cambridge Arc.
Further details on how the money will be used were not given, but it is likely to be spent on providing the infrastructure that is needed to enable housing developments to go ahead.
Housing affordability pressures in the Oxford-Cambridge Arc have intensified in recent years as the output of new homes has failed to keep pace with the creation of new jobs.
It is hoped that these pressures can be eased through building more properties to meet the growing demand.
The Government has previously committed to building one million new homes in the Arc by 2050.
4. Small builders lending scheme to launch
Hammond confirmed that the previously-announced scheme to support smaller house builders would be launched next month.
Under the scheme, which was first announced in last year’s Budget, the Government is providing £1bn of guarantees to support lending to small and medium-sized house builders through the British Business Bank.
It is hoped that the scheme will help to boost housing supply by enabling more small-scale sites to be developed through lowering funding costs for smaller house builders.
5. Planning permission reform
The Government announced plans to introduce new planning guidelines in the coming months to support housing diversification on larger sites, after a report by Sir Oliver Letwin concluded greater differentiation in the types and tenures of housing delivered on these sites would increase building rates.
A package of reforms will also be introduced allowing greater change of use between premises and a new permitted development right for existing buildings to be extended upwards to create new homes.
Finally, a green paper will be published detailing proposed improvements to accelerate the planning process.
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