Like Brexit, housing policy is an environment fraught with uncertainty, writes Steve Douglas
The politics and economics of housing were in full display in the budget. Politically, the government was still focused on delivering more homeownership and its 300,000 homes a year target. As for the economic situation, with Brexit uncertainty, a softening of the housing market and worries about affordability of housing, housebuilding rates are slowing, not speeding up.
Government’s response was a series of policy initiatives designed to sustain and stimulate housing providers’ delivery and to widen the pool of potential housebuilders, to include an enhanced role for housing associations and the removal of borrowing restrictions for local authorities to build.
The stimulants include extending the Help to Buy equity loan scheme for a further two years to 2023 and limiting it to first-time buyers; axing stamp duty for shared ownership buyers of homes below £500,000; giving retrospective stamp duty relief to first-time buyers of shared ownership; allocating the £500m Housing Infrastructure Fund to unlock a further 650,000 homes; and supporting British bank guarantees for SME builders.
This builds on the £2bn funding for social housing building from 2022, pledged in September, the bold statements in the 2017 housing white paper and the National Planning Policy Framework (2018) on increasing supply.
The stimulants are also echoed in the final report of the Sir Oliver Letwin review, published at the same time as the budget. This recommends making receipt of government support, including Help to Buy, conditional upon builders accepting suggested levels of affordable housing for large sites; providing small amounts of funding to support viability to deliver a range of tenures; new planning rules to encourage diversity of tenures on a site, to address the “homogeneity” of current developments, which he contends means builders develop and build them more slowly to avoid flooding the market; and the setting up of a national expert committee to support the introduction of new policy guidance. He also suggests enhanced compulsory purchase orders for local authorities, which speaks to the “use it or lose it” rhetoric of the former communities secretary Sajid Javid.
Letwin also acknowledges that there is a real issue over available labour, and recommends ‘flash training’ of brick layers co-ordinated by relevant government departments, unions and major housebuilders.
However, does all of this add up to a sustainable housing policy framework that will deliver the numbers needed? Like Brexit, it’s a policy environment fraught with uncertainty. And, if housing market trends are tougher than feared, then it’s likely all bets will be off maintaining, let alone increasing housing supply in the short and medium term.