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Hammond's housing budget: key points architects need to know

Hammond
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The chancellor’s Budget was dominated by housing, including the announcement of £15.3bn new capital funding for 300,000 new homes annually. Here are the AJ’s top takeaways 

1. Tackling the UK’s ‘housing challenge’ – and billions of funding for 300,000 new homes 

Following his comments at the weekend, it was expected that housing would form a key component of Hammond’s budget. ‘Successive governments over decades have failed to build enough homes to deliver the home-owning dream that this country has always been proud of, or indeed to meet the needs of those who rent,’ the chancellor said. Admitting that there is no ‘single magic bullet’ for tackling the UK’s ‘housing challenge’, Hammond added: ‘Solving this challenge will require money, it will require planning reform and it will require intervention.’

The chancellor’s main housing announcements were:

  • Committing £44 billion of capital funding to help deliver 300,000 net additional homes per year on average by the mid-2020s. Still, a look at the budget documents shows that Hammond has, in reality, only announced an extra £15.3 billion of extra funding for housing – but this brings the total support for housing, with previous announcements added together, to £44 billion over this period. 
  •  A further £2.7 billion to more than double the housing infrastructure fund.
  • Scrapping stamp duty for first-time buyers on homes up to £300,000, and for the first £300,000 of properties up to £500,000.
  • £400 million extra boost for estate regeneration.
  • £1.1 billion fund to unlock ‘strategic sites’, including new settlements and urban regeneration schemes.
  • New money for the home builders fund ‘to get SME housebuilders building again’.
  • £630 million ‘small sites’ fund to ‘unstick the delivery of 40,000 homes’.
  • £8 billion of new financial guarantees to support private housebuilding.
  • £34 million to develop construction skills.
  • Building up to one million new homes on the Cambridge-Oxford corridor by 2050.
  • Five new Garden Towns.

2. Planning reform focuses on urban areas and curbing land-banking

The chancellor was keen to point out that solving the housing crisis ‘takes more than money, it takes planning reform’. This reform, he said, will ‘focus on the urban areas’, making ‘best use of our urban land and continuing the strong protection of our green belt’. The chancellor added that, in particular, this would involve ‘building high-quality, high-density homes in city centres and around major transport hubs’.

Hammond also established an ‘urgent review’, to be chaired by Cabinet member Oliver Letwin, to look at the ‘significant gap’ between the number of homes granted planning permission and those built. He said an interim report would be produced in time for next year’s Spring Statement  – and warned that the government would not be afraid to clamp down on land-banking by developers.

‘If that report finds that vitally needed land is being withheld from the market for commercial rather than technical reasons,’ he said, ‘we will intervene to change the incentives to ensure such land is brought forward for development, using direct intervention, compulsory purchase powers as necessary.’

3. The rising cost of Brexit

Remember those ‘Vote Leave’ buses with their slogans about the cost of being in the EU? They didn’t include one about the £3 billion that would need to be set aside at the 2017 Budget to prepare to leave the union. Yet that’s exactly what Hammond announced today, saying negotiations on the UK’s relationship with the EU were ‘in a critical phase’.

He added: ‘We have already invested almost £700 million in Brexit preparations. Today I am setting aside over the next two years another £3 billion. And I stand ready to allocate further sums if and when needed.’

Whether architects see this open wallet as a sound investment in creating an economy where building design can flourish, or a waste of cash that could have been spent on designing buildings, will possibly depend how they voted last June.

But we do know that Norman Foster derided the ‘madness of Brexit’ at a gala dinner at last week’s World Architecture Festival.

4. Green light for infrastructure opportunites

If you came to work rammed into a Tube carriage or snarled up at traffic lights, you’ll have reason enough to celebrate the £1.7 billion for intra-city transport. But as well as giving you more time at your desk, the Transforming Cities Fund could also lead to work for architects.

Targeting projects that improve connectivity, reduce congestion and use new mobility services and technology, the cash could create a range of localised infrastructure schemes. These could well knock on to residential and commercial development, given the current drive to exploit the potential of transport links.

Beyond this, many buildings-focused architects may well look at the current levels of infrastructure spending and wonder if they could widen their remit.

Half of the £1.7 billion promised today will be allocated via a competition, while the rest will be handed to metro mayors. This will see the West Midlands benefit to the tune of £250 million, Greater Manchester by £243 million, Liverpool £134 million, West of England £80 million, Cambridgeshire and Peterborough £74 million and Tees Valley £59 million.

Hammond also pledged £300 million to ensure HS2 infrastructure can accommodate future Northern Powerhouse and Midlands Engine rail schemes.

5. Work continues in the wake of the Grenfell Tower tragedy

The chancellor announced that a new community space will be built for people affected by the Grenfell Tower fire.

In his speech he said: ‘We will provide Kensington and Chelsea Council with a further £28 million for mental health services, regeneration support for the surrounding areas and to provide a new community space for Grenfell United community group.’ 

The Budget document added that ministers would ensure the cash was available for essential measures to make buildings safe from fire.

It emerged this week that the RIBA’s application to become a ‘core participant’ on the Martin Moore-Bick-chaired review into the 71 deaths caused by the tragic fire in June had been rejected.

A RIBA spokesperson said: ‘We continue to engage closely with ministers, civil servants and advisers involved in the various strands of work related to the Grenfell Tower tragedy, making recommendations to enhance the future fire safety of buildings for all residents and users.’

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Readers' comments (2)

  • Chris Roche

    Stamp Duty is a stupid tax - paid by buyers at a time they can least afford it. The Chancellor's position is economically naive as it will fuel house price inflation and encourage house builders to put up new house prices thereby transferring the windfall to those making most profit from the transaction. The tax should be abolished and replaced with a sales tax thereby taxing the house builders rather than the buyers, who in turn who pay a tax on the sale of the property, arguably from their significant tax free profit. Affordable homes remain paradoxically unaffordable.

    Chris Roche / Founder 11.04 Architects

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  • John Kellett

    'land-banking'? No planning permission lasts for more than three years, what would be the point of setting out to 'hoard' land? It might happen as a result of the industry collapsing economically but there would be no point deliberately holding onto land and having to renegotiate planning every three years. The rise in value mostly disappears after the three years.

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