Chancellor Rachel Reeves has pledged more than £5bn to deliver plans to boost housing in the form of support for housebuilders, a boost to the Affordable Homes Programme and investment into the development of sites across the country.
In her Autumn Budget, Reeves said £3bn of additional support would be given to SME housebuilders and the Build to Rent sector in the form of housing guarantee schemes to support the private housing market.
Furthermore, she pledged to add £500m to boost the existing Affordable Homes Programme, taking its total value to £3.1bn, which would deliver an extra 5,000 homes.
The cash injection into the housing market announced in the Autumn Budget was billed as a move to “kick-start the biggest increase to social and affordable housebuilding in a generation”, helping the government to achieve its total housing delivery target.
The government will set out details of future grant investment beyond the current Affordable Homes Programme in phase two of the Spending Review, which is aimed at supporting greater investment in new affordable housing from social housing providers.
Some £46m of additional funding will be provided to recruit and train 300 graduate and apprentice planners, accelerate large sites that are stuck in the system and boost and upskill local planning authority capacity to deliver housing targets.
An intermediary’s guide to understanding client vulnerability
Sponsored by Halifax Intermediaries
A £56m investment to deliver 2,000 homes at Liverpool Central Docks and a £25m investment in a joint venture to deliver 3,000 energy-efficient new homes across the country were among other housing delivery initiatives.
Meanwhile, investment in the remediation of unsafe housing, in the wake of the Grenfell Tower tragedy, will rise to over £1bn in 2025-26. This includes new investment to speed up remediation of social housing. The government will set out further steps on remediation later this autumn.
‘Unlikely to move the needle’
While welcomed, the investment was not considered enough to achieve the level of housebuilding required to meet the country’s needs.
Oli Creasey, property research analyst at Quilter Cheviot, said: “For housebuilders, and the housing sector more generally, today’s Budget includes incrementally positive news, but nothing to materially change the outlook.
“The £500m boost to the existing Affordable Homes Programme is of interest, but is a relatively small investment that will result in ‘up to 5,000’ new homes. Compared to the target of 1.5 million new homes over the next five years, this is unlikely to move the needle.
“Of more interest will be the expected announcement of future grant investment beyond the existing Affordable Homes Programme in phase two of the spending review, concluding in Q2 2025.”
In the social housing sector, Right to Buy discounts will be reduced and councils in England will be allowed to keep all the receipts generated from sales to help them protect existing stock of homes.
There will be a consultation on a new long-term social housing rent settlement of Consumer Price Inflation plus 1% for five years aimed at offering long-term certainty for social housing providers. The government hopes this will give the sector the confidence to build tens of thousands of new social homes.
Elsewhere in the Budget, the stamp duty surcharge will be increased from 3% to 5% from tomorrow, but capital gains tax on residential property will remain unchanged.
