Back to the 1970s in Hammond’s housing boom
Chancellor lines up £44bn funding and planning reform to hit target of 300,000 homes a year
BRITAIN will build more homes than at any time since 1970, Philip Hammond vowed as he unveiled plans to get Britain building again.
The Chancellor announced that developers will receive £15 billion in loans and guarantees to build more homes, while councils will be bypassed if they fail to grant enough planning permissions.
He also commissioned a review into developers that fail to build on land after receiving planning permission, warning that the Government could step in and buy the sites using compulsory purchase orders.
However, house builders said that although the measures were welcome, they fell significantly short of the “step change” required to meet the Chancellor’s target of building 300,000 homes a year by 2025 – up from 217,000 at present.
Mr Hammond rejected calls by Sajid Javid, the Local Government Secretary, for the Government to borrow £50billion to spend on housing, but announced extra funding that will increase the value of the Government’s package of investment, loans and guarantees for house building to £44 billion.
He said: “If we don’t increase supply of land for new homes, more money will inflate prices, and make matters worse.
“We will remain dependent on the major national house builders that dominate the industry, and if we don’t train the construction workers of tomorrow we may generate planning permissions, but we will not turn them into homes. Solving this challenge will require money, planning reform and intervention.”
Under the plans announced in the Budget, the Government will spend £8 billion on new guarantees to underwrite housing developments. It will also offer £1.5 billion-worth of loans specifically targeted at small house builders, while a further £2.7 billion will be spent on infrastructure to support more housing.
The Government also announced a series of planning reforms, including forcing councils to accept new developments if they are only building 75 per cent of the homes required under binding targets.
Ministers also want to make it easier to replace shops and offices with new homes by removing the need to apply for a change in land use, and will push for taller buildings in city centres.
Mr Hammond also said he wants to “kick start” five new Garden Towns, although he acknowledged that they will not be built in this parliament.
Treasury plans to build on green belt land were rejected after they were opposed by Theresa May.
Oliver Letwin, the former Cabinet minister, will conduct a review into “land banking” by developers.
The Chancellor said: “If it finds that vitally needed land is being withheld from the market for commercial, rather than technical, reasons we will intervene to change the incentives to ensure such land is brought forward for development using direct intervention compulsory purchase powers as necessary.”
Mr Hammond also announced that local authorities will be able to charge a 100 per cent council tax premium on empty homes. He said: “It can’t be right to leave a property empty when so many are desperate for a place to live.”
Councils can currently charge empty home owners a premium of 50 per cent if a home has been empty for two years or more.
As well as foreign investors the tax will also hit second home owners whose properties are unoccupied.
The Chancellor also set out a £28 million scheme to help rough sleepers in Manchester, Liverpool and the West Midlands.
The Local Government Association said: “If we are to truly get back to building 300,000 homes a year, then the Government needs to ensure all areas of the country can borrow to invest, so that they can resume their role as major builders of affordable homes.”