In his recent spring statement, the Chancellor of the Exchequer affirmed the Government’s plan to deliver 300,000 homes a year on average, by the mid-2020s.
London, the UK housing market’s most in-demand location, is also set to receive £1.7 billion of affordable housing grant, intended to deliver a further 27,000 homes by the end of 2021/2022. This expands the mayor’s housing budget to £4.8bn up to 2022, and constitutes 60% of the total £8bn of grant funding that the government is specifying over this period.
This should provide an added boost to the city, especially in light of the capital’s crippling scarcity of affordable homes and skyrocketing rents, with thousands of homeless families surviving in temporary accommodations or on social housing waiting lists.
West Midland also received a housing deal to the tune of a £100m grant from the Land Remediation Fund, which will enable the region to build 215,000 homes by 2030-31. This spells an increase of almost 16,000 homes a year on the region’s current annual output of 12,000, exceeding the government’s estimation of local housing needs for the West Midlands.
The chancellor’s statement further touched on the benefits derived by over 60,000 property buyers, as a result of the stamp duty concessions introduced in November’s Budget. The reprieve involves investors no longer having to pay the property tax on homes up to £300,000 and £500,000 in London, which has prompted more interest among first-time buyers, operating at the lower end of the market.
Furthermore, the statement also confirmed the Government’s intention to partner with over 40 areas which have submitted bids into the £4.1 billion Housing Infrastructure Fund, to accelerate the supply of new homes, and the Housing Growth Partnership, which provides financial support for small house builders, which is also set to be doubled at £220 million.
The announcements, however, were met with a measure of reserve by the industry, as many operators felt that more was needed to be done to improve supply and transaction numbers at the grass root level, which would in turn keep property prices in check, while reaping meaningful benefits for the housing market.
On the other hand, others felt that while the stamp duty concessions have definitely improved purchase intentions among first-time buyers, further support in terms of incentives were needed at the top end of the market, which suffers as a result of exorbitant moving costs. This in turn causes a trickledown effect, as those intending to upsize struggle with the scarce supply of appropriate properties, consequently impacting others further down the property ladder.
All things considered, the Chancellor’s spring statement was met with both, elation and concern. Only time will tell whether these measures will prove adequate to meet the challenges facing the UK housing market.