Today’s pre-Budget report sees the government congratulating itself on the rescue. Now for the really difficult part: the recovery.
Chancellor Alistair Darling was able to boast in his speech that ‘repossessions are now running at around half the rate they were in the early 1990s’. I wonder which party was in power then.
And he announced that some of the time-limited support measures announced in the aftermath of the banking crisis will continue, including improved income support for mortgage interest for a further six months.
‘There will, of course, be a cost to this and other continued government support,’ he said. ‘But the cost to families of losing their home would be immense. And it would be a false economy for the country. For the more successful these measures are in restoring confidence to the housing market, the lower the cost will be to the exchequer.’
While the stamp duty holiday will finish as planned at the end of the year, HomeBuy Direct will continue into 2010/11.
However, buried deeper in the pre-Budget papers and not mentioned in the speech itself are plans for a housing recovery strategy ‘to support a timely and effective housing supply response through the recovery, in order to maximise delivery of high quality, energy efficient homes’.
The strategy has five key elements:
- Boosting land supply with checks, incentives and penalties for local authorities depending on how they handle their five-year land supplies
- Reducing regulation by ‘scaling back section 106 requirements’, looking at the ‘case for and form of regulation on Lifetime Homes’ and not making it mandatory until 2013 at the earliest and ‘establishing a national baseline for total regulatory costs by Budget 2010’.
- Studying the drivers of housebuilding growth and what can be done to improve ‘diversity and innovation’.
- Enhancing the role of local authorities in building new social housing ‘including examining the scope for local authorities to borrow against the revenues from new council homes to support the delivery of housing where this offers value for money, and considering interactions with wider reforms to the council housing finance system’.
- Reforming the delivery of infrastructure for new homes.
That raises all sorts of intriguing possibilities. The second point sounds like ministers have been listening hard to housebuilders’ complaints about regulation. It remains to be seen what scaling back section 106 means but the Lifetime Homes decision represents a u-turn on the targets announced in January. Might that national baseline lead to some kind of movement on the code for sustainable homes too?
The fourth point sounds like local authorities might be able to win extra freedoms for council housing beyond those announced so far.
But the pre-Budget report was not all about homeowners and housebuilders. Council tenants will see a cut in their rent rise from April 2010 while private tenants receiving excess local housing allowance have won a one-year reprieve.
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