Budget 2018 - Implications for Housing30/10/18
The Government’s support for the Housing sector continued, with some real treats included in the Halloween budget.
The focus on local authorities continues as the Government looks to them to add to the number of new homes being built, and also to take a strategic role in ensuring that large developments in their area are designed to their full potential. Local authorities will also gain new powers to maximise development opportunities.
This follows recently established programmes like Mayor Sadiq Kahn’s Building Council Homes for Londoners programme, which has injected £1 billion towards more than 11,000 council homes over the next four years and has, in effect, created 26 new mid-size housing associations.
In his speech, the Chancellor made a number of key announcements which address the UK housing shortage and promise to enable major growth in the housing sector by providing greater funding certainty over the coming decades:
- A further £500 million for the Housing Infrastructure Fund for councils, providing a total of £5.5 billion to help offset the development costs of physical infrastructure like roads and power supplies. The aim is to boost housebuilding, and the government estimates that this extra injection of cash will encourage the construction of 650,000 new homes.
- A new wave of strategic partnerships between Homes England and nine housing associations running through 2021/22, which will enable the construction of 13,000 new affordable homes in England. These include Platform Housing Group, Optivo, Southern Housing Group, Orbit, Thirteen, Vivid and a partnership of Guinness Partnership and Stonewater.
- A new scheme by the British Business Bank providing guarantees to support up to £1 billion in lending, with the aim of encouraging SME housebuilders to build more houses. Recent years have seen fewer small housebuilders, and an increase in numbers will open up opportunities for new partnerships to deliver homes.
- A consultation on new permitted development rights (1) to allow upwards extensions above commercial premises and residential properties and (2) to allow commercial buildings to be replaced with residential housing. This is with a particular focus on delivering more homes on the high street, and is on the back of previous switch allowing change of use from office to residential.
- Simplification of CIL contributions to give developers greater certainty and councils a greater share of uplift in land values, in order to enable a better provision for infrastructure and affordable housing.
- A consultation is to be launched looking at the private provision of shared ownership and other models of affordable home ownership.
- A further, but limited, 2 year extension to Help to Buy. This will be for first time buyers only, and for homes with values up to 150% of regional averages.
- Stamp duty will be abolished for buyers of shared ownership homes worth up to £500,000.
In summary, the direction of travel is still supportive with the aim of increasing the delivery of new homes and the Government is making practical changes to support this. The Conservatives are keen to see local authorities and the private sector playing their part, giving new partnership opportunities for housing associations. Capsticks are currently helping several clients with such partnership – get in touch for more information.