Philip Hammond’s Budget contains some big numbers and ambitious promises on housing but you don’t have to delve very far to find the real priorities.
Contrast, for example, what’s happening with housing, tax and welfare, two different measures that were heavily predicted and one that was desperately needed.
Stamp duty is being cut, but the chancellor has gone further than the expected holiday by abolishing it completely for first-time buyers of homes worth up to £300,000 or the first £300,000 of homes worth up to £500,000. The cut applies from now and will cost £3bn by the end of 2022/23.
Problems with universal credit are being addressed with measures including the scrapping of the seven-day waiting period, making advances easier to get and allowing continued payment of housing benefit for two weeks after a universal credit claim. The total cost is £1.5bn by 2022/23 and there is another delay to the rollout.
The universal credit changes are welcome but will still leave claimants potentially facing destitution and people in work thousands of pounds a year worse off than they would have been under the previous system.
Originally published as a column for Inside Housing on May 20.
Some very big questions on housing, welfare and tax are looming ahead of this Budget.
If there is not the same sense of raised expectations that surrounds the prospects for land and investment, the answers given by Philip Hammond on November 22 will still go a long way to determining what type of housing system we will have going into the 2020s.
I’ve written many times before about the way that the aftermath of the financial crisis in 2008 and the policies adopted under George Osborne since 2010 have combined to create a system in which older and better-off home owners have gained at the expense of younger and poorer renters.
A piece in the Financial Times last week used figures from the Resolution Foundation to quantify just how much: housing costs for households below average incomes rose by £714 between 2007/08 while they fell by £271 for those on above average incomes. The biggest gains went to the richest 10% of households, whose average housing costs fell by £1,206.
And that these figures do not include substantial increases in housing wealth over the same period as house prices have risen.
So what could Hammond do to redress the balance?
Originally published as a column for Inside Housing on November 13.
More than ever before, this year’s Budget looks like a watershed moment for housing.
Philip Hammond is under mounting pressure from all sides to do something big and bold and break with the failed policies of the past.
The calls for something radical are coming from more than just the usual suspects and are for more than just a cheque with lots of zeros.
Conservative MPs know that they cling to power (just) thanks to the votes of elderly home owners. Brexit may dominate everything but many of them realise that beneath the surface housing is one of the key issues poisoning their relationship with the under-45s.
They understand that cynical policies like Help to Buy are no longer enough, that the party is running out of time and that it has to look at policies that were previously unthinkable.
Yet conventional wisdom says that we’ve heard all this before, that Hammond’s caution and the Treasury’s orthodoxy will turn thinking that was big and bold into outcomes that are tame and timid on November 22.
After the announcements in the last few weeks of an extra £10bn for Help to Buy, another £2bn for social housing and the u-turn on the LHA cap for social and supported housing, how much is left for the chancellor to say (or spend)?
However, another view says that the housing question has such serious social, economic and political implications that the answers cannot be put off any longer. See this blog by Toby Lloyd for a good round-up of some possibilities.
In a series of columns ahead of the Budget, I’ll be looking at some of the crucial questions concerning investment, tax and welfare and, to kick things off, land. Will the Budget be big and bold – or tame and timid?
Originally posted on March 8 on my blog for Inside Housing.
For once this was a Budget that was more significant for what it did not say about housing than for what it did.
In one sense the lack of announcements was nothing new. Chancellor Philip Hammond had already announced that this would be his last Spring Budget and that the main event will be in the Autumn.
The extra money for social care was inevitable if inadequate and it will have an impact on housing organisations.
Housing itself got a single mention in Hammond’s speech in the section on the next generation. ‘Will they be able to get on the housing ladder?’ was the rhetorical question that did not get any answer. (Nope, not unless they’ve got rich parents, since you ask.)
For once (unless I’ve missed something) the background Budget documents revealed little more than an intriguing consultation on a redesign of Rent a Room Relief, the tax relief that homeowners can claim when they let out a room.
The aim is ‘to ensure it is better targeted to support longer-term lettings. This will align the relief more closely with its intended purpose, to increase supply of affordable long-term lodgings’. Presumably the plan is to stop people avoiding tax on AirBnb earnings?
The Office for Budget Responsibility (OBR) Economic and Fiscal Outlook has some background on the profile of housing association spending spending and borrowing, which was less than it expected last year but is being brought forward at the end of the spending review period.
But what really caught my attention were some graphs on the scale of the continuing squeeze on benefits. This reflects the decisions that Hammond did not take to ease the effects of the four-year freeze on most working-age benefits announced by George Osborne in 2015.
Originally published on November 23 on my blog for Inside Housing
Wednesday’s Autumn Statement by Philip Hammond is good news for housing on several different fronts.
First, at long last housing is being recognised as infrastructure. That’s important enough in itself but Mr Hammond went even further by pitching housing as part of the solution to the key economic problem of productivity.
Along with transport, digital communications and research and development, housing will be part of the chancellor’s £23bn National Productivity Investment Fund. In financial terms, accelerated construction, affordable housing and the new Housing Infrastructure Fund represent a third of the total cost.
Mr Hammond also named “the housing challenge” alongside the productivity gap and the imbalance in prosperity across the country as one of the economy’s long-term weaknesses.