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Industry news


‘Housing budget’ gets mixed reviews from the sector


with mixed reviews from landlords, builders and economists. In fairness there were many positives in Philip


I


Hammond’s second budget and he has set an ambitious target to be building 300,000 new homes a year by the mid 2020s. But there was scepticism over the resources allocated and in particular there was disappointment that local authorities have not been given a central role in the house building drive. It also looks like they will have to wait until 2019/20 before they can borrow more to build themselves. The Chancellor left his headline-grabbing


announcement on abolishing stamp duty for first time buyers until near to the end of his speech, but within minutes of him sitting down the Office of Budget Responsibility was reporting that the main beneficiaries of this would be existing home owners as the move would lead to an increase in property values. More detailed analysis revealed that first time


buyers in many parts of the country would only see very modest savings from the stamp duty cut. For instance the saving would be £11.82 in the north of England where the average price paid by first time buyers was only just over the previous stamp duty threshold of £125,000. A much bigger hurdle to prospective owners was and remains the size of the deposit they have to find - at £32,899 it dwarfs the average Stamp Duty charge of £1,654.


POSITIVES First of all, lets quickly run through the positives: • The changes in Universal Credit in particular reducing the initial waiting period from six to five weeks, the commitment to paying two weeks of housing benefit and extending the repayment period for advances from six to 12 months;


• A range of incentives amounting to £44bn in loans, grants, guarantees etc, to encourage house building at levels not seen in this country since the 1960s;


• Encouragement for small and medium sized builders to play their part in the building programme;


• A strong focus on investing in infrastructure to make it easier for major building projects to proceed, particularly in places like the Oxford to Cambridge corridor, including Milton Keynes;


• Remediation of contaminated sites that could be used for new housing; and


• Doubling the charge that councils can make from 50 to 100 per cent extra council tax on properties that have been empty for two or more years is


It was promoted in advance as being a budget to get Britain building the large volume of houses the country needs, but eventually it ended up with mixed reviews from landlords, builders and economists


welcome but will this really have an impact on the rich and oligarchs. This will need to be monitored over the next year to see what impact it has on the number of empty homes.


On the flip side of the coin, we also see the following:


NEGATIVES • There was no new money for undertaking fire safety works to tower blocks in the wake of the Grenfell Tower fire. This is now a huge political issue and is undermining some support for the Government’s housing policies. When ministers say that installing fire sprinklers is not essential they risk alienating the public and in particular the residents of hundreds of tower blocks across the country;


• Following announcements at the Conservative Party conference, there were hopes of a tax boost for private landlords who offer longer term tenancies – but this turned out to be a damp squib, with only the promise of another consultation on the subject;


• It is doubtful that the skilled physical resources


t was promoted in advance as being a budget to get Britain building the large volume of houses the country needs, but eventually it ended up


exist to deliver the new housing and there are fears the supply sector will struggle to deliver all of the building materials and components required;


• The focus on new housing remains on homes for sale, with truly affordable housing for rent barely featuring;


• The failure to unfreeze local housing allowance rates, which could impact on tenants living in the private rented sector and force more of them into homelessness; and


• In too many instances the Chancellor announced the need for more or fresh reviews or studies whereas most people working in the sector believe the solutions are known. What appears to be missing is the political will to make difficult decisions and the financial resources to deliver.


CURATE’S EGG David Orr, Chief Executive at the National Housing Federation was probably speaking for many when he said: “The measures are a good signal of intent from the Chancellor. On their own, they maymake an incremental difference but will not deliver a step change in the supply of new homes. “While the Chancellor is right to say there is no


silver bullet, a long-term supply of affordable land is the critical factor. We will need the Government to ensure that public land is used for housing and that private land is bought where it is needed to create new communities.” A similar message came from Gavin Smart,


Deputy Chief Executive at the Chartered Institute of Housing, who said: “The renewed commitment to tackle the nation’s housing crisis represents significant progress and we welcome the ambitious new target to deliver 300,000 new homes a year. "Of course the important thing is that we are


building the right homes in the right places and that people can afford them. We have to make sure that any new funding supports the building of new homes that meet the varied needs of individuals and families across the UK. For many people social rents, which are much cheaper than private rents, remain the only truly affordable option and more must be done to support this crucial form of housing.” Speaking on behalf of private landlords, RLA


Policy Director David Smith said: “With ever growing numbers of families with children in private rented housing we recognise their needs for longer tenancies. “The Chancellor could have acted on proposals


we have made by providing tax relief for landlords prepared to offer longer tenancies and taking action against mortgage lenders who block them being granted. Instead we have yet another consultation related to the private rented sector, but tenants cannot live in consultations.” But Smith welcomed moves to include a tenant’s


rent payment history in their credit scores. Mr Smith added: “We welcome the Government’s acceptance of our recommendation to include rent payment history in credit scores. This is good for tenants wanting to access mortgages themselves and good for landlords in better understanding the background of prospective tenants.”


www.housingmmonline.co.uk | HMM January 2018 | 5


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