Autumn Statement 2016: The property industry, like many other sectors of the economy, dislikes uncertainty and this is a period of uncertainty. However, as Winston Churchill said:“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty”
Today’s Autumn Statement gives great hopes for optimism in what is a testing political and economic climate in the UK. The raft of measures identified today should have real impact because they are about funding rather than policy, and deliver powers and funding to the major metropolitan cities. In respect of housing, the Autumn Statement reiterated the government’s commitment to address the long-term challenge of housing supply in England.
The key expenditure points were summarised by the chancellor as a doubling of capital expenditure to £7.2bn over the next five years, including a £2.3bn housing infrastructure fund to deliver infrastructure for 100,000 new homes. This is coupled with greater devolution and new borrowing powers for cities.
In London, expenditure includes a £3.15bn commitment to assist in the delivery of 90,000 affordable homes and a £1.4bn fund to deliver 40,000 additional homes outside of the capital.
This funding commitment should make a real impact. Importantly, housing is allocated more funds up front, with £1.47bn in 2017/18, reflecting the government urgency in accelerating delivery. Our figures show that the London mayor’s commitment to increasing the average proportion of affordable housing in major developments has already started to take effect; the boost to funding will accelerate this trend.
The government’s backing today of a wider range of housing opportunities to deliver supply will be welcomed as a boost to supply. In addition to widening tenure, is the need to return to broaden the composition of new housebuilding, increasing the contribution of housing associations, SMEs, custom build and of course Build for Rent.
Encouraged by the funding commitments in the Autumn Statement, opportunities for scaling up models such as custom build to deliver housing on a greater scale should be more attractive. This will offer the prospect of a more balanced housing market.
The funding announced today in both housing and transport infrastructure should result in opportunities for the delivery of sustainable and accessible housing development. However, the strong reaction against Green Belt release may temper this. Outside London we have seen a shift in thinking on Green Belt, driven by housing pressure and a political will. Indeed, professional bodies such as the RTPI now acknowledge the need to consider Green Belt releases alongside brownfield land to deliver housing.
The debate on this needs to continue, together with amending the penalties of not having an up-to-date local plan in place which we will see in the Housing White Paper.
The Housing White Paper publication is crucial to capitalising on the momentum of the funding commitments in the Autumn Statement.
It should be a turning point in the way we plan for and deliver housing.
Caroline McDade is a director in the London planning team at Deloitte Real Estate
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