High hopes for London housing as Hammond takes aim
Housing is now the government’s number one priority. Not only has the Chancellor allocated £7.2bn towards the construction of new homes (more funds than for any other key national infrastructure), there’s a clear focus on getting those homes where they’re needed most, which should include London and the South East.
The Chancellor’s specific measures for London include providing new powers of devolution to the Mayor and the GLA housing settlement of £3.15bn, which means 90,000 new affordable homes in construction by 2020-21.
The average proportion of affordable housing in major developments started to increase after Sadiq Khan’s election in May. The first five developments through the full GLA planning process since May has included an average of 37% affordable housing. This compares to the average proportion of affordable housing in the final projects inherited from the previous administration of around 25%.
Today’s housing settlement should help secure more affordable housing in London, particularly on land currently owned by the public sector, which often has to overcome complex constraints to development, such as building close to key transport links. It will also help that the new National Productivity Investment Fund will stump up £1.7bn by 2020-21 to speed up housebuilding on public sector land through partnerships with private sector developers.
The Chancellor confirmed today a step change of ambition to deliver a housing market for “sale and rent”. There continues to be positive recognition for the Build to Rent sector, and its role in increasing the supply of professionally managed homes for younger generations in London, who might otherwise need to be accommodated in affordable housing.
The Housing White Paper to be published “in due course” will propose more positive changes to deliver homes and speed up the planning system. This will provide an opportunity to address other thorny issues not covered by the Chancellor today, such as the future of starter homes and the need for Build to Rent investors to pay 3% stamp duty on second homes.