Hammond pledges to up housing delivery to 300,000 per year – reaction
Chancellor Philip Hammond has announced plans to deliver 300,000 homes per year by the mid-2020s but many experts doubt whether this will happen.
One of those was Benson Hersch, chief executive of the Association of Short Term Lenders.
He said: “Ultimately we have heard promise after promise from successive governments on house building, to little effect.
“Without a significant increase in social housing this is a pipe dream, especially as current figures include permitted development (offices to flats for example) rather than ‘ground up’ building.
“For many, a house to call their own remains out of reach as the deposits required are still too high.”
The director of marketing at Foundation Home Loans, Jeff Knight, was pleased with the announcement but said it’s affordable homes that are needed in particular.
Knight said: “In reality, the commitment to building more homes and addressing planning regulation is what we needed to address the supply and demand imbalance, but affordable homes do not have to equal ownership and there should also be a focus on developing good quality, affordable homes that can be rented.
“Doing this will not only support tenants while they save for a deposit, but will further open up PRS to the more motivated, professional landlords who can inject fresh energy and ideas into the market.”
Phoebus Software sales and marketing director Richard Pike felt the Chancellor announced some good ideas but the public need to see action.
Pike said: “The government has shown its intent for the housing market.
“Now we just need to see it put into action, especially when it comes to empty properties and ensuring land with planning permission is built upon.
“Even with the help for first-time-buyers the market will not be ‘fixed’ until supply is keeping up with demand.”
Similarly, Richard Tugwell, a director at specialist lender Together, agreed with the plan to build more houses but stressed that more funds need to be made available.
He said: “The pledge to build 300,000 new homes a year has to be a positive move towards fixing issues in the housing market which have existed for decades.
“But it’s essential that finance is available for developers to deliver on this promise.
“Those with an interest in the property sector, including lenders like Together, and brokers, need to all work alongside the government to ensure property developers and investors have access to funding to help ensure these ambitious targets are met.”
Jeremy Duncombe, director, Legal & General Mortgage Club criticised Hammond for the government’s stringent protection of green belt.
He said: “A major reason for a shortfall in housing supply is due to our outdated green belt regulations.
“Nimbyism is preventing the homes needed for the next generation from being built and it’s an outdated view that needs to be changed.
“There are some areas of the green belt that are ripe for development, without spoiling the countryside.
“We hope the government will re-consider this issue soon and understand the necessity of modernising legislation to ensure all available land is used as constructively as possible.”
Nick Sanderson, chief executive of Audley Group, welcomed the commitment to building more houses but stressed that, with a growing elderly population, we need more housing for them.
He said: “It is predicted that by 2037 there will be a 70% increase in the over 65 age group, yet the UK’s housing market is nowhere near prepared to meet the growing demand from first-time buyers, let alone to deliver retirement properties.
“Commitment to house building is welcome but not every first time buyer wants to move into a new build and stamp duty exemptions to help older buyers downsize would be far more cost neutral in the long-term.
“Two in five UK homes are under-occupied, of which half are occupied by those aged 50 to 69, in the main due to lack of quality accommodation for them to move into.
“It’s time to address the facts: if we truly want to kick-start movement in the market, we need to stop continually plastering over the cracks and invest in quality housing options for the older generation.”
Lea Karasavvas, managing director of Prolific Mortgage Finance, claimed the government has only worsened to the housing crisis.
He said: “Primary school children have taken a stamp duty bullet so millennials can get on the housing ladder.
“It is uncharacteristic of the Chancellor to kick the can down the road like this, given how much he has stressed in the past the importance of not saddling future generations with the cost of solving society’s current problems.
“The whole point of the housing crisis is that demand is too high relative to supply.
“Fiddling with the economic stop cock by effectively handing out free money only exacerbates the problem and won’t help buyers, brokers, lenders or sellers in the long run.
“Businesses and markets function best when they’re not caught in a boom-and-bust cycle and that’s what we’re all stuck with.”
L&G’s Duncombe also called for confirmation on the government’s Help to Buy scheme.
Duncombe added: “The lack of clarification in today’s Budget about the future of the Help to Buy scheme will no doubt have left some housebuilders in a state of limbo.
“Having only been guaranteed until 2021, we urgently need confirmation as to what will happen to the scheme after this date, to enable both developers and lenders to plan for the long-term.”