The Chancellors Autumn Budget announced on 22 November included
a package of new measures aimed at raising housing supply to
300,000 homes per year by the end of this Parliament through:
- A package of £15.3billion of new financial support over the
next 5 years.
- Further reforms of the planning system to bring forward more
land for housing and make better use of underused land in urban
- Provision of £204million of funding for innovation and skills
in the construction sector.
The government will strengthen the powers of the Homes and Communities Agency (which is to be
renamed Homes England) to use investment and planning powers to
intervene more actively in the land market and announced a package
of investment funding to include:
Land Assembly Fund - The government will
provide £1.1 billion for a new Land Assembly Fund. The fund will
enable Homes England to work alongside private developers to
develop strategic sites, including new settlements and urban
Five New garden towns - The government will
bring together public and private capital to build five new garden
towns, using appropriate delivery vehicles such as development
corporations, including in areas of high demand such as the South
Housing Infrastructure Fund - The Budget
commits a further £2.7 billion to the competitively allocated
Housing Infrastructure Fund (HIF) in England. This takes the total
investment in the HIF to £5 billion.
Small sites: infrastructure and remediation -
The government will provide a further £630 million through the NPIF
to accelerate the building of homes on small, stalled sites, by
funding on-site infrastructure and land remediation.
Home Building Fund - The Budget announces a
further £1.5 billion for the Home Building Fund, providing loans
specifically targeted at supporting SMEs (Small & Medium sized
Enterprises) who cannot access the finance they need to build.
Housing guarantees - The government will
explore options with industry to create £8 billion worth of
new guarantees to support housebuilding, including SMEs and purpose
built rented housing.
Strategic planning & Housing deals - The
government will support more strategic and zonal planning
approaches through housing deals in the South East, where housing
need is at its most acute. As a first step, the government has
agreed a housing deal with Oxfordshire, part of its wider strategic
investment in the Cambridge-Milton Keynes-Oxford corridor -
including £30 million a year for infrastructure and further support
for affordable housing and local capacity. The government is also
continuing housing deal negotiations with Greater Manchester, the
West Midlands, Leeds and the West of England.
The Budget also contained a number of announcements that will be
of particular interest to stock retained councils and their tenants
Selected lifting of Housing Revenue Account (HRA)
borrowing caps - ARCH has long called for the lifting of
HRA borrowing caps and our latest report "Raising the roof" submitted to government in
advance of the Budget reiterated that call. The government have
responded by announcing a selected lifting of borrowing caps for
councils in areas of high affordability pressure to enable councils
to build more council homes. Councils will be invited to bid for
increases in their caps from 2019-20, up to a total of £1 billion
by the end of 2021-22. The government also promised to monitor how
authorities respond to this opportunity, and consider whether any
further action is needed.
Estate regeneration - The Budget provides £400
million of loan funding for estate regeneration to transform
run-down neighbourhoods and provide new homes in high‑demand
Fire safety works - The Budget re-confirms
that, where measures are essential to make a building fire safe,
the government will make sure that current restrictions on the use
of local authority financial resources will not prevent them going
ahead. However it stops short of making financial resources
available to all councils, committing only to await the findings of
the Hackitt Review into Building Regulations and
Fire Safety and respond to the recommendations when they are
Grenfell Tower - The Budget commits £28 million
additional community support to victims, including new mental
health services, regeneration support for the Lancaster West
estate, and a new community space.
Housing Association Right to Buy & the High Value
Asset Levy - Although not specifically mentioned in the
Chancellor's Budget speech, the Budget confirms that government
will proceed with a £200 million large-scale regional pilot of
the Right to Buy for housing association tenants in the Midlands.
There is no specific mention of the HVA (High Value Asset) Levy but
ARCH understands that the idea of funding the extension of a RTB to
housing association tenants through a HVA Levy on stock retained
councils has not been abandoned although there is likely to be an
announcement soon that councils will not be expected to pay the HVA
Levy in the next financial year 2018-19.
Universal Credit - the government have
responded to concerns about the impact of Universal Credit and have
announced in the Budget that they will provide more support to
Universal Credit claimants:
- From January 2018 those who need it, and who have an underlying
entitlement to Universal Credit, will be able to access up to a
month's worth of Universal Credit within five days via an
interest-free advance. The government will extend the period of
recovery of any advance from six months to twelve months. New
claimants in December will be able to receive an advance of 50% of
their monthly entitlement at the beginning of their claim and a
second advance to take it up to 100% in the new year, before their
first payment date
- From February 2018 the government will remove the seven-day
waiting period so that entitlement to Universal Credit starts on
the first day of application. ARCH has previously called for the
seven day waiting period to be removed in our report "Pause for Thought" submitted to the
government in August this year.
- From April 2018 those already on Housing Benefit will continue
to receive their award for the first two weeks of their Universal
- The government will also make it easier for claimants to have
the housing element of their award paid directly to their landlord
but have not set out any further details as yet.
To support these changes the government will roll out Universal
Credit more gradually between February 2018 and April 2018, and
roll-out to all Job Centres will be complete in December 2018.
Homelessness -The Budget also contained announcements on a
number of measures to address homelessness and rough sleeping
including the establishment of a Homelessness Reduction Taskforce
and investment of £28million in three Housing First pilots in
Manchester, Liverpool and the West Midlands and £20million of
funding for schemes to support people at risk of homelessness to
access and sustain tenancies in the private rented sector.
ARCH Policy Adviser Matthew Warburton has prepared an ARCH Briefing on the housing
implications of the Budget for ARCH members.
ARCH Chief Executive John Bibby comments:
ARCH has long been campaigning for the government to lift
HRA borrowing caps to enable councils to build new council homes
and the Budget announcement that government will lift the HRA
borrowing caps for councils in areas of high affordability pressure
is to be welcomed and marks a significant shift in government
policy towards council housing.
Nevertheless there are clearly strings attached and we would
have much preferred an overall lifting of the HRA debt caps but
nevertheless this announcement is extremely welcome. Our concern is
that the opportunity to bid is likely to be limited to councils
within as yet to be defined areas of "high affordability pressure".
The government need to define what it means by this as quickly as
possible and ensure that the bidding process itself is clear and
simple so as not to take up unnecessary resources within local
authorities in simply putting together bids that may ultimately be