Housebuilding is set to receive a boost during the Spending Review today…
The housing crisis is an issue that has been at the forefront of debate recently, with a lack of affordable homes leading to numerous reports of “Generation Rent”—droves of people stuck in the rental market because buying property is too expensive.
For many younger people owning a property is now so far out of their reach it is a pipedream, but homeownership remains an important rite of passage.
The government has done its utmost to keep the nation building, as well as trying to tackle the housing shortage. Earlier this year it announced a new target for housing of one million properties by the end of this parliament. Planning rules were also relaxed for brownfield land and offices to help developers build more.
However, there is a sense of is this too little, too late? The shortfall has pushed the cost of property ownership so high that for many it is unattainable, even with government measures to help—particularly for those in the south of the country where prices have rocketed.
But is building more homes the key to solving this issue? The government certainly thinks so.
The Autumn Statement, which will be coupled this year with a Comprehensive Spending Review, will outline the budget ahead. Among the cuts and changes it is expected housebuilding will be named a priority, with more than 400,000 affordable homes set to be built across England.
Chancellor George Osborne will reveal “the biggest affordable housing programme since the 1970s”, and has promised a “bold plan to back families who aspire to buy their own home”.
Among the measures to get the nation onto the housing ladder is starter homes, which will see £2.3bn paid directly to developers to help first-time buyers. This will involve substantial reductions on house prices, including 20 per cent discounts on properties worth up to £450,000 in London and £250,000 elsewhere.
Around £4bn will be used to build 135,000 Help to Buy, shared ownership properties. These will be aimed at households that earn less than £80,000 or £90,000 in London.
£200m will be put aside for 10,000 new homes for tenants to live in at a reduced rate while saving for a deposit. Tenants will have the first dibs on the home if it is sold.
Older people and people with disabilities will also benefit from £400m to build 8,000 homes.
However, the focus on building more is certainly good news for the construction sector, which has seen something of a mixed bag lately. October saw a slowdown in output, but figures still indicate growth. Additionally, there have been difficulties in plant manufacturing and firms such as JCB and Caterpillar have suffered as demand for machinery has declined. Promises from the government that building will remain a priority will undoubtedly be welcomed by the sector, as this will bolster building over the next few years.
Whilst I find the promise of more ‘affordable’ homes encouraging, I worry that the Chancellor’s idea of affordable will still be out of the reach of the very people he is supposed to be helping. What really does the term ‘affordable’ mean to someone whose bank account is in a pretty healthy state?