Budget 2018: Hammond unveils £500m to unlock 650,000 new homes

In a bid to unlock potentially 650,000 new homes, the chancellor has announced a £500m injection to the government’s Housing Infrastructure Fund.

This time last year, Philip Hammond announced a five-year £44bn housing programme, and abolished stamp duty for first-time buyers on properties up to £300,000 but today he revealed he would extend the stamp-duty relief for all first-time buyers of shared ownership properties valued up to £500,000.

Speaking to the Commons, Hammond said around 121,000 first-time buyers had benefitted from this relief so far with the number of first-time buyers said to be at an 11-year high. 

The £500m cash injection is part of a government capital grant programme, allowing councils to provide additional grant funding for new infrastructure, with the goal of encouraging housing development in areas of high housing demand.

Furthermore, the chancellor said the next strategic partnerships with nine housing associations had been decided in which its hoped will deliver 13,000 homes across England, from up to £1bn pounds of British business bank guarantees, to support the revival of SME house builders. 

“I can announce today a further £500m for the housing infrastructure fund to unlock a further 650,000 homes," Hammond told MPs. 

“We’re consulting on simplification of the process for the conversion of commercial property into new homes, and because we want to see parishes and neighbourhoods, enabling more homes for sale, to local people to buy at prices they can afford, we’re providing funding to empower up to 500 neighbourhoods to allocate or permission land for housing through the neighbourhood planning system for sale at a discount to local people in perpetuity.”

Hammond also used his speech to applaud Sir Oliver Letwin for his review into build out rates, which concluded that the large housebuilders are not engaged in “systematic speculative” landbanking. The review makes several recommendations for the reform of the planning system and the chancellor vowed to publish a full response next year.

Responding to the housing announcement, Helen Morrissey, spokesperson at Royal London said: “While the extension of this stamp duty relief will help first time buyers to get a step on the housing ladder we would argue that more can be done to make the housing market more liquid. While first time buyers can buy a home what of those further up the ladder who cannot afford to either move to a larger home to accommodate their growing families or those looking to downsize.”

Ian Shrubsall, head of Strategic Planning at WSP said the firm welcomed the government’s commitment to implementing the Lewin Review in the new year, and the recognition that speculative land banking is not part of the business model for major house builders, or a driver of slow build out rates. 

“We would support a focus on the funding and delivery of infrastructure and servicing to unlock land for development more quickly, and to facilitate multiple starts on sites, with different housing fit for all,” Shrubsall added. “It’s great to see increase investment in the housing infrastructure fund and extension to the stamp duty threshold which will help us deliver the 650,000 homes the UK needs."