What will chancellor Philip Hammond’s Autumn Statement mean for affordable housing, infrastructure and the construction industry generally? Follow the AJ’s rolling blog of today’s events to find out
Melanie Leech, chief executive of the British Property Federation
’This Budget’s hidden gem is the spending on infrastructure to help bring forward housing sites. Infrastructure spending is housing delivery’s silver bullet and the considerable commitment to invest about £2bn a year is therefore very welcome. The £1.7bn for accelerated construction on public land will also help upscale the modular construction sector, meaning a more efficient industry and the faster delivery of homes.
’We are also looking forward to the housing white paper and the policies that Government is working on. We desperately need far more homes and the Build-to-Rent sector is there to support Government meet that objective. Most large-scale Build-to-Rent landlords do not charge tenants fees and therefore they will not be particularly perturbed by the Chancellor’s announcement, but what is banned and how it works in practice will need carefully working through.
’One big disappointment is the continued stamp duty surcharge on institutional Build-to-Rent housing, which sends out the wrong signals when those institutions are willing to invest £billions on the new homes that we need.’
’We also remain concerned that the proposals to restrict tax relief on interest costs and reform the loss relief rules will inadvertently hinder investment in real estate and infrastructure, even where no tax avoidance is taking place. We are disappointed that the government is going ahead with implementation in April 2017.’
Stephen Radley, director of policy at Construction Industry Training Board
’Today’s announcements offer more certainty for the pipeline of work ahead, not just nationally but at a regional and local level in infrastructure and housing.
’This will help to boost business confidence following the uncertainties thrown up by Brexit. The local and regional investment should help bring more small firms into the supply chain, where much of the training takes place.
’With action on several fronts to boost homebuilding, it’s vital that we have the workforce in place to deliver the extra homes. That’s why CITB has joined forces with the Home Building Federation to set up the Homes Building Skills Partnership to support businesses across the UK to address their training and recruitment needs.’
Nick Roberts, Atkins’ UK and Europe chief executive officer
’The chancellor has placed economic growth and quality of life at the heart of his infrastructure decisions. Being clear on these outcomes means that our most pressing needs around housing, roads, railways and digital networks feature at the top of the priority list, and the government can borrow a sensible amount of money to fund the improvements with a high degree of confidence that they will get a good return on their investments.
’I welcome the Autumn statement recognising the interdependencies between different types of infrastructure. The new £2.3 billion fund focusing on the link between housing and local infrastructure will help unlock valuable public land whilst ensuring local communities can cope with growing populations. And the commitment to become a world leader in fibre and 5G digital networks will not only make a difference to businesses and consumers in their everyday lives, it will also help enable the more technology-enabled infrastructure, such as a digital signalling and connected and autonomous vehicles, which will form a key part of our future.’
Rob Weaver, director of investments at Property Partner
’The severe shortage of affordable housing is a critical threat to UK productivity and digging deeper into treasury coffers is a welcome step towards resolving the broken market.
’Targeted funds for affordable homes, and across a ‘wider range of housing’, shows a sage commitment to service all tenure types - both rental and homeownership.
’What’s more, today’s added boost to infrastructure will reduce the burden on current hotspots with improved transports links allowing increased mobility for workers. It’ll open up new areas of the country and potentially help close the gap in regional inequality.’
Michael Thirkettle, chief executive of interdisciplinary international construction and property consultancy McBains Cooper
’This provides some good news regarding the government’s commitment to spend on social and economic infrastructure, in particular the £1.4bn aimed at delivering 40,000 new affordable homes in England, £2.3bn housing infrastructure fund to help provide 100,000 new homes in high-demand areas and £3.15 billion for London as its share of the national affordable housing funding to deliver over 90,000 homes. For years successive governments have announced ambitious house building targets which are never met.
’We are disappointed that there was no announcement to streamline the planning process or free up land on the greenbelt – much of which is derelict land rather than areas of beauty – as that would also help the shortage of land.
’We were also disappointed not to see further investments in training and apprenticeships in the UK construction industry, as we will need to train and re-train UK people in readiness for any restrictions in the supply of skilled foreign workers following Brexit.’
Julie Hirigoyen, chief executive at UK-GBC
‘If the government is serious about delivering “a housing market that works for everyone”, new homes must be built to higher energy efficiency standards, to prevent us having to retrofit them in the future. The government must also do more to support energy efficiency measures in existing homes, making them cheaper to heat and healthier to live in.
‘The chancellor’s focus on R&D and productivity is also welcome; low-carbon technologies are the ultimate “disruptive technology” and there are clear economic opportunities for the UK to position itself as a global market leader. High-quality, sustainable buildings can also improve the productivity of the organisations that work in them.’
Robbie Kerr, director of ADAM Architecture
‘The National Productivity Infrastructure Fund is a positive step to provide continued momentum and confidence to the broader construction industry, which will help draw the country’s economy together and ensure that the benefits are felt across the country.
‘The Housing Infrastructure fund is something but perhaps is not really sufficient to meet the admirable aims it sets out to achieve. This is an area that needs urgent attention or will face longer term challenges and issues from the next generation. The commitment to invest £2.3 billion for 100,000 homes equates to just £23,000 a new home. A similar shortfall in the reality of what is actually needed lies in the amount for affordable homes that will subsidise to the effect of £35,000 per affordable home. In the south of England it is questionable if this will really be sufficient to get the number of homes suggested built.
‘Finally the individual buildings: the details of the funding for Wentworth Woodhouse will help a house that has suffered dramatically at the hands of state-run businesses, which can now have fresh impetus for its restoration and make a significant contribution to the estimated costs of the repairs.’
Terrie Alafat, chief executive of the Chartered Institute of Housing
‘The extra investment to support the building of 40,000 new affordable homes and the greater flexibility in funding for housing providers to build homes of all tenures, both of which we had asked for, are particularly welcome. It is also pleasing to see large-scale investment in infrastructure to support new house building.
‘We would, however, have liked to see more to support people who need housing the most, with more funding diverted specifically to support social rents, and a strategic rethink on welfare measures that we believe make housing inaccessible to a significant number of individuals and families.’
Trudi Elliott, chief executive of the Royal Town Planning Institute
‘The RTPI has consistently argued that housing and infrastructure need to go hand in hand, and that planners are well positioned to realise the government’s vision of creating more productive communities throughout the country. We welcome the chancellor’s infrastructure-led investment to boosting productivity and unlocking housing, and the shift of the housing strategy to include different tenures and more affordable housing. It is overdue and we need it urgently.
‘The key to ensuring that the significant investment he announced today in national, regional and local infrastructure will really benefit communities and business, is to value and use the vast expertise of planners in this country to plan in a strategic and holistic way.
‘Devolution plays a key role in incentivising a whole wider range of issues within planning and development. The announcements today that give greater incentives for city regions and counties to co-operate in meeting housing need across their areas, as well as additional support for LEPs to help unlock more housing, are in the right direction and need to be rolled out across more areas.’
Bill Price, property director of WSP | Parsons Brinckerhoff
‘Housing remains high on the agenda in terms of both rhetoric and some new measures to back it up. With affordable housing at record lows and a focus on the JAMs (just about managing), new funding here is a sensible and much-needed policy. The concern is that governments are judged solely on the number of houses built.
‘Therefore it is really encouraging to see the chancellor make the direct connection between housing and infrastructure. If underutilised public land or even transport corridors around stations can be used for housing or other development, that would align well with the needs of the sector. That’s why announcements on regional rail, roads and even broadband are just as important victories for the property market. Our sector is suffering from a lack of confidence, not cash. This new public sector investment will play a part in kick-starting the levels of property construction we need to see.’
.@hammond also announced expanded regional pilot of Right to Buy for housing association tenants - next step in delivering manifesto promise— Gavin Barwell MP (@GavinBarwellMP) November 23, 2016
John Assael, chairman of Assael Architecture, says the government’s lack of financial support for affordable housing is the main reason behind the housing shortage generally
‘There seems to be a consensus that the provision of new housing is one of the most important issues facing this country, especially in London and the South East. The chancellor needs to acknowledge that the decline in government financial support for affordable housing is the major reason for the decline in new housing generally, as private housing for sale has had a reasonably resilient track record to deliver between 100,000 and 200,000 homes per annum over the past 20 years; the provision of public housing has fallen off the cliff by comparison, with most of it provided by private housebuilders anyway, in the form of a Section 106 tax.
‘He also needs to shift away from the usual Conservatives’ obsession with home ownership, towards other tenures including Build to Rent; the housing crisis needs a more flexible approach otherwise there is no prospect of achieving his targets. In my view it’s all hot air (again) with very little evidence either of significant, deliverable, public money being allocated to public housing or for new policies to address planning constraints and delays, green belt and public sector release of land and financial incentives.’
Keith Aldi, chief executive of the Brick Development Association, says focus must be on sustainable quality homes
‘For the construction industry, what is important is that Hammond breathes life into a turbulent sector. The BDA welcomes the news that major infrastructure investment will continue. We are also happy to see that Hammond is addressing the issue of affordability in the interim period, and not simply waiting for supply to balance demand. We are hoping that continued, long-term investment will help to aid the chronic housing crisis. However, the focus must be on quality houses that are sustainable as opposed to cheaper houses in greater density.’
Richard Laming, head of economics at Turley, stresses importance of Barwell releasing his housing white paper
‘While the government has restated its commitment to getting Britain building, the Autumn Statement remains light on the detail of how this will be done. The commitments to 40,000 new affordable homes and the Housing Infrastructure Fund falls far short of what is required to significantly boost the supply of land to address the housing crisis.
‘The government’s response to reform planning will be a key part of the solution in terms of releasing more land. The chancellor promised a Housing Paper “in due course”. It is our view that this is more urgent than the chancellor appears to think it is. The housing white paper needs to quickly leave Mr Barwell’s in-tray and start to help to address the nation’s housing challenge.’
Robin Paterson, joint chairman and chief executive of United Kingdom Sotheby’s International Realty, says stamp duty changes were necessary
’It is disappointing the chancellor did not take this opportunity to correct the stamp duty woes in the second-home market. Osborne suggested these changes in a different climate, one unaffected by the global uncertainty 2016 has seen. While some correction to pricing was needed, these corrections have certainly taken place and a kick-start to the middle and high end London market is now necessary. Stagnation at any end of the housing ladder is not good for the economy, suffocating the top end has consequences for the lower and vice versa.
‘At the very least, the chancellor should have reduced second-home stamp duty on buy-to-let properties and kept the rates as they are for those with multiple homes they use as residences. These landlords are providing much needed rental accommodation, especially in densely populated cities such as London and Manchester. The more the government picks on the landlord, the more rental prices will increase and home ownership will continue to decline.’
Henry Smith, chief executive of Aitch Group
‘I welcome Philip Hammond’s announcement that the government will double annual spend on housing as it finally takes action to help address a chronic shortage of homes.
‘I believe it has been a missed opportunity for the government to not take action on stamp duty in today’s Autumn Statement. The existing set-up is having a detrimental impact on the housing market, especially for family homes in London and the home counties. We are in the middle of a housing shortage which requires investment, and this tax change is estimated to have already cost our economy nearly £1 billion due to a a reduction in the number of people selling homes. This has also had knock-on effect on services, reducing the demand for decorators, removal firms and building material suppliers.’
Martin Skinner, chief executive of Inspired Homes
‘I am pleased that the government is recognising the need for housing with the announcement of £2.3 billion housing infrastructure fund for up to 100,000 new homes and an additional £1.4 billion towards 40,000 new affordable homes. Real steps are needed to address the longstanding shortage of homes in the UK, and the government has now taken measures to inject some confidence into the industry in order to support the next generation of homeowners.
‘It is vitally important that these new measures quickly filter to homebuilders so we can begin work. Young people who are currently locked out of the buying market, especially in London, will only see this as a step in the right direction when new affordable homes are actually created.’
Hammond closes his autumn statement, and shadow chancellor John McDonnell rises to make his response.
He says the so-called ‘long term economic plan’ has failed.
He says we face Brexit ’unprepared and ill-equipped’.
Hammond says this is his first and last autumn statement. He says he will abolish the autumn statement.
No other major economy makes hundreds of changes every year, he says.
Next year’s spring budget will be the final spring budget and then there will be an autumn budget, well before the new financial year starts.
Then there will be a spring statement, responding to the forecasts from the OBR, but no major fiscal event.
He will not make significant tax changes twice a year just for the sake of it, he says.
He says this is a ‘long overdue reform’ to the UK’s tax process.
British Property Federation on Hammond’s ban on letting fees
’This is very good news for London’s tenants. Many large-scale build-to-rent landlords don’t charge their tenants fees, so this will not be an issue for them. For smaller landlords, many of whom are already experiencing financial pressures because of various recent tax and regulatory changes, this may be a seen as a further challenge. It is completely understandable that the government wants to act decisively, but it is important the government consults properly on what exactly is being banned.
‘Some fees such as referencing fees and refundable deposits are wholly defensible, but there are other dubious fees that are not. It is these fees that should be the target of government action.’
Hammond moves on to letting agent fees, he says this is ‘wrong’.
He says the government will ban letting agent fees to tenants ‘as soon as possible’.
Hammond announces national living wage will increase from £7.20 per hour to £7.50 in April next year.
Pay rise worth over £500 a year to a full-time worker, he says.
Hammond talks about personal allowance.
He says it will rise to £11,500 in April.
He says since 2010 28m people have had their income tax cut, and 4m people have been taken out of income tax altogether.
Labour’s London Assembly housing spokesperson Tom Copley welcomes announcement London will receive £3.15bn for affordable housing
’This is a huge victory for the mayor, who has secured the biggest ever affordable house building settlement for London from the government. He has lobbied extensively for more money for affordable homes, whilst his predecessor allowed the housing crisis to become entrenched.
’The move to funding affordable rent as well as shared ownership is a welcome recognition from government that their failed Starter Homes policy was neither affordable nor fit for purpose in the capital. London needs genuinely affordable homes, and we now need an assurance that a significant number of these homes will be pegged at the social rent level London needs most acutely.
’If the government are really serious about tackling the housing crisis, this money needs to be followed by far greater powers over housing and planning for London. Most importantly we need a lift on council borrowing restrictions to allow them to build more new council housing, and ‘use it or lose it’ powers for the mayor to wield when developers have planning permission but don’t build the homes.’
Hammond says his priority is to ensure Britain remains number one destination for business.
He says government will stick to the business tax ‘road-map’ set out in the March budget.
He says rural rate relief will be increased to 100%.
British Property Federation
’The British Property Federation wholeheartedly supports the Chancellor’s statement that he will increase infrastructure investment, which is good for jobs and the economy. We look forward to analysing the detail when it becomes available.
The announcement of £2.3bn for infrastructure to support the delivery new houses is vital. If we are to deliver the thousands of new, we will need new transport links, digital investment and supply hubs needed to supply new residents in their new homes.’
Crucially affordable housing programme will now fund all tenures - affordable rent + shared ownership + rent to buy #morehomesofeverytype— Gavin Barwell MP (@GavinBarwellMP) November 23, 2016
Hammond talks about devolution.
A new city deal for Stirling is being negotiated, he says.
He says city regions will get new borrowing powers.
London will receive £3.15bn for 90,000 affordable homes, he says.
Hammond says ‘for too long’ economic growth in our country’ has been concentrated in London and the south east
No other major economy has such a gap betweenits capital city and second and third cities, he says.
He gives go ahead to programme of major road schemes in the north, and other programmes relating to the northern powerhouse.
He says an evaluation will make the east Midlands rail hub to go ahead.
He announces £1.8bn of local growth fund to english regions; over £500m to a number of regions.
Hammond says: ’I will act today, with just seven days to spare, to save Wentworth Woodhouse in Rotherham’
Hammond says he has written to the National Infrastructure Commission.
The govenrment will spend between 1% and 1.2% of GDP from 2020 on economic infrastructure.
Hammond says there will be an extra £1.1bn invested in UK transport networks.
He says some of this will go on rail, which Jeremy Corbyn will welcome.
Hammond announces £2.3bn housing infrastructure fund for up to 100,000 new homes in least-affordable areas
He also announces £1.4bn to deliver 40,000 new affordable homes
Hammond says goal of home ownership remains for too many ‘out of reach’
‘Challenge of delivering housing’ is not new, he says.
He says housing minister Barwell will be delivering a housing white paper soon.
Hammond says the government will form a new national productivity investment fund worth £23bn, focusing on innovation and infrastructure.
Investment in R&D will rise by £2bn a year by 2020, he says.
Hammond will ‘priotitise high value investment’ in infrastructure and innovation
He says he UK lags the US and Germany by 30 points in productivity, meaning it takes a German worker four days to make what a British worker makes in five.
He says that means longer hours and lower pay for British workers.
He says this has to change if we want to build an economy that works for everyone.
Hammond announces the borrowing figures as £68.2bn this year, and £59bn next year.
After this, the figures are:
2018-19 - £46bn
2019-20 - £21bn
2020-21 - £20.7bn
2021-22 - £17.2bn
Borrowing will be 3.5% this year, falling to 0.7% by 2021-22, he says.
Hammond says, over the forecast period, growth is expected to be 2.4% lower than forecast after the EU Referendum, according to the OBR
Hammond says economic recovery is not just confined to the south east, saying employment has grown fastest in the north
12:39 Philip Hammond’s autumn statement
Hammond says he wants to build an ‘economy that works for everyone’ and economy has shown resilience since EU referendum
Johnny Caddick, managing director of Moda Living
’Delivering the infrastructure necessary to support new homes will be crucial to boosting supply, so while the promised £1.3bn for shovel-ready projects like road improvements will help boost productivity and create jobs in the short-term, they are unlikely to have the transformative effect on residential development Crossrail has had.
’To create the Northern Powerhouse or Midlands Engine, agglomeration to help achieve scale is critical, and that means investing in cross-country and inter-city transport beyond HS2. Theresa May has made rebalancing the economy away from London a top priority, and that requires for genuine counter-weights to the capital to emerge, so we need to see more projects like HS3 for the North and elsewhere.’
Theresa May ‘one thing I will rule out’ is a second EU referendum - she says article 50 will be triggered by the end of March next year
Theresa May: ‘We do need to build more homes…there is more for us to do’
Mark Farmer, chief executive of Cast Consultancy
‘It is good to see new housing and infrastructure receiving the focus so desperately needed in the Autumn Statement. It is particularly pleasing to see the increased commitment to the National Affordable Homes Programme, which is a specific recommendation of my recently published government review of the construction market. A tenure-diverse housing market including affordable rent and shared ownership is crucial to underpinning more stable long-term demand in construction and also can act as a catalyst for investment in innovation in house-building, which ultimately will reduce delivery costs. I now await the housing white paper with interest to understand how some of these broader issues are addressed in connection with the Chancellor’s announcements today.
While I also welcome the government prioritising large infrastructure projects, such as Heathrow’s third runway, there are still major issues with how these major projects will be physically delivered as I suspect we are about to experience at Hinkley Point. We ultimately require a construction industry that is modern, dynamic and much more productive so we can deliver all of these built assets with constrained resources.’
11:08 Twitter reaction
My #AutumnStatement today is focused on preparing & supporting the economy as we begin writing a new chapter in our country’s history— Philip Hammond (@PHammondMP) November 23, 2016
Julian Goddard, partner and head of residential at Daniel Watney LLP
‘For landlords hoping for a reprieve after the tax raids launched by George Osborne, today’s Autumn Statement makes for depressing hearing. The additional stamp duty and cuts to mortgage relief are here to stay it seems, despite evidence they are squeezing the supply of new rental homes at a time when demand for private rented accommodation is growing massively.’
Keith Aldis, chief executive of the Brick Development Association
‘We know that Hammond supports the Home Builders Fund, which will provide £1 billion of short-term loan funding that will be used for small builders and custom builders to complete the 25,500 houses by 2020. We are hoping that continued, long term, investment will help to aid the chronic housing crisis. However, the focus must be on quality houses that are sustainable as opposed to cheaper houses in greater density.
’Also, current help to buy initiatives have various life spans and it is important that Philip Hammond clarifies what measures will be in place for the period during which the Home Builders Fund and other long-term investment is active. It is crucial that with a necessary significant increase in housebuilding that the issue of affordability is addressed in the interim period, and does not simply wait for supply to balance demand.
‘Following the statement, he must turn these promises into on the ground project delivery. It is great to see brick manufacturers responding so positively to the challenge and we look forward making our contribution to get Britain building again.’
Jeremy Blackburn, RICS Head of Policy
’Philip Hammond is something of a political novelty, he is a chancellor who listens. We haven’t yet seen him pictured in a hard hat, but he clearly understands the housing sector better than his predecessors.
’We warned the Treasury that the UK is facing a critical rental shortfall of 1.8m homes. That tells us that for all the rhetoric, David Cameron and George Osborne’s Starter Homes Strategy failed to get off the ground. The Private Rented Sector became a scapegoat under the previous chancellor, and because of that it suffered.
’Yet with increasingly unaffordable house prices, the majority of British households will be relying on the rental sector in the future. Now it seems that Hammond will drive an affordable rental agenda and can get Britain building in a way that benefits a cross section of society, not just the fortunate few.’
9am Early announcement
According to widespread media reports chancellor Philip Hammond is expected to pledge £1.4 billion towards building thousands of affordable homes in his Autumn Statement later today.
Hammond will outline plans to release cash for housing associations, local authorities and some private developers through the government’s capital grant fund to help build 40,000 new homes.
According to the BBC, the chancellor will also scrap upfront letting agents’ fees in bid to help the 4.3 million households in private rented housing.