Was Alistair Darling, in what was likely to be his last Budget, going to leave a good legacy as far as housing is concerned?

The widely trailed two-year relief on stamp duty for first-time buyers of homes at less than £250,000 was welcomed by house builders and shared ownership landlords alike. As was the announcement to slash red tape for developers.

The Treasury also trumpeted the £7.5 billion the government has spent in the last two years to underpin the ailing house building industry. This has paid for 112,000 affordable homes and 15,000 private homes that might not otherwise have been built. It works out at an average cost of just over £59,000 per home. On the face of it this is not bad value for money.

However, foolish government rules meant the bulk of this cash was paid out as grant, squandering a golden opportunity to invest the £7.5 billion and ensure a return to reinvest in the lean years ahead.

This situation becomes even more stark: initial analysis of the Treasury’s projected spending on ‘housing and environment’ in the coming financial year shows a fall of £2 billion on last year’s £29 billion. The only other spending area to see a decrease is transport, while the protected areas of health and education both see rises.

The government is aware of the looming squeeze on housing capital spending. As a result, it was yesterday due to announce an offer to English local authorities as part of its reform of the housing revenue account that would see them building 10,000 homes a year by 2014/15. Housing associations will, with some justification, protest that were the funds for this to come to them they would be able to build many more homes. What they are not able to bring to the party, however, is land. Councils can and this a crucial part of the deal in receiving public funds to build.

If Mr Darling’s legacy is to take a large step towards breaking the hegemony of private builders in supplying new homes, he might yet be recalled fondly by social landlords.

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