‘We are the builders’ says Osborne in boost to housing
Shares in Britain’s listed house builders gave back some of this morning’s gains after George Osborne’s measures to stimulate building and buying proved underwhelming.
Housing had been tipped by many to be an area where the Chancellor would spring a surprise in his Autumn Statement. A raft of measures were announced, but none that could be called a “rabbit out of the hat”.
Mr Osborne, announcing to MPs “We are the builders”, said that he was doubling the UK Government’s housing budget, to £2bn a year, in a move that he said would lead to 400,000 homes being built by 2020. Many of those will be starter homes made available to buy at 20% below market value. Others will be offered for shared ownership or to rent.
Some restrictions on shared ownership were removed, and Mr Osborne also promised that he would release extra publicly owned land for building on – enough to erect a further 160,000 homes.
Scottish builders immediately called for an equal commitment on housing north of the border.
Philip Hogg, chief executive of trade body Homes for Scotland (HFS), said: “Whilst we are still absorbing the detail of the Chancellor’s announcement, its sentiment is absolutely clear: to back those who aspire to buy their own home. And the fact of the matter is that, as the Scottish Government’s own research shows, this aspiration applies equally to the majority of Scots.
“Supporting this ambition by stimulating private sector construction will bring wide-ranging benefits, including boosting affordable housing delivery through the direct contribution our industry makes in this area via planning policy.
“The Chancellor has also maintained his commitment to the successful Help to Buy scheme to 2021 and introduced a new tailored version specifically for London. This is in marked contrast to the position here where the announced successor to the Scottish Government’s scheme faces budget reductions of up to 50% and will likely be less accessible to buyers.
“We further note the Chancellor’s intent to remove constraints to allow all sectors to play a role in affordable housing delivery as well as his support for SME home builders on planning and finance, something HFS has been in discussions with the Scottish Government on for many months.
“With Scotland facing the same challenges as elsewhere in the UK, we therefore call on the Scottish Government to broaden the balance of its approach to housing delivery and place equal emphasis on having enough homes of all tenures in the right places to meet the diverse housing needs and aspirations of all those living in Scotland.”
Alan Brown, chief executive of CALA group, commented: “We welcome the housing legislation in this afternoon’s Autumn Statement, which clearly is positive for CALA and the wider market.
“The government has consistently demonstrated its commitment to solve the housing crisis and the additional measures announced by the Chancellor today will go further towards achieving this aim while benefiting the overall UK economy.”
But there was bad news for prospective landlords or those looking to increase their portfolio. A new 3% surcharge on top of existing stamp duty will be levied on buy-to-let properties and second homes from April 2016, raising about £1bn.
Alex Gosling, chief executive of online estate agency housesimple.com, said “Ouch. That’s another blow to landlords, so soon after the cut in mortgage interest tax relief.
“In the space of two announcements, George Osborne has become Enemy No1 for the buy-to-let sector.
“We are likely to see a stampede over the next year to purchase buy-to-let properties before the stamp duty hike comes into force. But the future is now decidedly uncertain for the UK’s buy-to-let sector.
“It seems like the Government has forgotten, or just ignored the large number of amateur buy-to-let landlords who aren’t looking to make vast fortunes, but are just looking to supplement their incomes.
“We are not talking about the professional landlords with multiple properties, we are talking about the pensioners, for example, who have invested in buy-to-let to boost their pensions, because low interest rates have decimated their savings income. Hopefully, this hasn’t sounded the death knell for buy-to-let.”