The headline grabbing announcement at the government’s Autumn Statement may have been the news that George Osborne has decided to backtrack on controversial plans to bring in a £4.4 billion cut in tax credits. However, the chancellor had good news for a number of different sectors, with housing being at the forefront.
In his speech this afternoon (November 25th), Mr Osborne said he was committing to a £7 billion investment in a programme that will see more houses built across the UK, in a bid to help control the supply and demand imbalance nationwide.
The chancellor called the funding the largest investment in a housing programme by any government since the 1970s, as he broke down where the money will go.
Elsewhere in the housing market, Mr Osborne announced a three per cent surcharge on stamp duty for buy-to-let properties, which will see investors having to pay more when they invest in the private rented sector.
With regards to the house building fund, the chancellor said some £2.3 billion will be paid directly to developers to build 200,000 starter homes aimed at first time buyers. These will be offered to buyers at a discounted rate of 20 per cent on homes worth £250,000 regionally and £450,000 in London.
On top of this, Mr Osborne has also promised £400 million to the increasingly popular specialties sector, where homes for older people and those with disabilities will be the focus for developers.
The chancellor also took a bold move to look towards the development of the rental market, which is often ignored by central government. He announced £200 million for 10,000 new homes that tenants can live in for five years, paying a reduced rate of rent, before they can buy their home at the end of their tenancy.
However, it was not all rosy in this regard, as even though Mr Osborne promised some money for rental homes, some experts feel he has not gone far enough.
Adam Challis, head of residential Research at JLL said that the government still has too much of a focus on people buying their own homes.
“This government’s narrow focus on home ownership is a serious concern however. Support for the private rented sector and social housing is vital to protect the financial stability of millions of households, for whom ownership is beyond reach,” he said.
“The private rented sector is the fastest growing tenure in the UK and deserves direct support through the planning system and through the release of public land.”
Elsewhere in the announcement, there was good news for the NHS, with an increase in budgets from £101 billion to £120 billion between now and 2020, and for the education sector, which heard that its funding will remain protected.
The chancellor also talked positive in terms of growth, reiterating the predictions of a 2.4 per cent growth in 2015 as a whole. He also said the UK economy is the fastest growing in the world, alongside the US, since 2010.