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George the builder

There was good and bad news in the spending review - but at least landlords now know where they stand

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There was a collective sigh of relief in Manchester at this week’s Chartered Institute of Housing conference as chancellor George Osborne and his number two Danny Alexander finally revealed details of the government’s spending review.

First, the good news - victory for our Grant Britain Homes campaign, which called for a commitment from the Treasury to continue capital subsidy to support house building at sub-market rents. Mr Osborne promised £3 billion of capital investment in affordable homes, which later turned out to be a £3.3 billion, three-year extension of the affordable homes programme.

This is good news for landlords, because an equity investment by government - for instance, in a rent-to-buy product aimed at the ‘squeezed middle’ of the population who are struggling to raise a deposit to get on the housing ladder - would appear as debt on their balance sheets, further constraining rather than bolstering their capacity to build more homes.

The ability of English landlords to plan for the future and potentially take on greater development risk was also given a fillip with the announcement of a 10-year rent settlement under which rents will rise above inflation, but will be pegged to the slightly lower consumer price index as opposed to the retail price index.

Many landlords had planned for rents to rise level with or even below the rate of inflation, so this move has been welcomed by chief executives who could talk of little else prior to the announcement.

The decision to cap welfare payments tempered this, though, because it will likely see many benefit recipients further struggle to pay their rents from April 2015.

There was also £3.8 billion to reduce dependency on acute hospital care among older and disabled people.

Home, Family Mosaic and One Housing Group are at the vanguard of social landlords hoping to work with clinical commissioning groups to deliver care before and after hospital admissions to cut NHS costs. Another reason to breathe more easily.


READ MORE

Landlords face fresh scrutiny to access £3.3bn potLandlords face fresh scrutiny to access £3.3bn pot
New rent settlement ‘good news’ for landlordsNew rent settlement ‘good news’ for landlords
Osborne grants Britain homesOsborne grants Britain homes

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