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Budget ‘not bold enough’, Orr tells MPs
Measures announced in the Autumn Budget do not have “enough muscle” to make a significant difference to the housing market, David Orr has said.
Appearing before the Treasury select sommittee today, Mr Orr, chief executive of the National Housing Federation, said: “All of the direction of travel is right, but none of it is bold enough.”
Chancellor Philip Hammond unveiled a raft of new policies last week, including extra money for the Housing Infrastructure Fund and estate regeneration, extra borrowing capacity for local authorities and several tweaks to the planning system.
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“There are a range of useful measures in the Budget, which will have a combined effect of seeing some, I would think, relatively small incremental changes and seeing some relatively small growth in the number of new homes built,” Mr Orr said.
But he said that if the government is to achieve its target to build 300,000 homes a year by the mid-2020s, it will need to take “muscular” action on land supply and a “much, much more vigorous approach to the use of publicly owned land”.
And he added that the 300,000 homes goal “feels like an aspirational target at the moment”.
He called for more investment in new homes for social rent compared with Help to Buy and said “more active planning” was needed to keep down the cost of land and capture value through development and increase levels of affordable housing on new schemes.
Also appearing before the committee, Nick Forbes, leader of Newcastle City Council and senior vice-chair of the Local Government Association, raised questions about the new policy to invite local authorities to bid for a total of £1bn in extra Housing Revenue Account borrowing capacity.
He suggested the measure will not “meet the scale of the challenge that we face”.
“Rather than having a competitive process, it’s better to just lift the borrowing cap for all local authorities, so that we can all get on and take the decisions that are in the interests of our respective communities,” he said.
KEY BUDGET MEASURES AT-A-GLANCE
- Investment of £44bn in housebuilding in capital funding, loans and guarantees over the next five years to boost supply of skills, resources and land
- Commitment to be building 300,000 homes a year by mid-2020s
- £1.5bn package of changes to Universal Credit announced. This includes the scrapping of the seven-day waiting period at the beginning of a claim, making a full month’s advance available within five days of a claim for those that need it and allowing claimants on housing benefit to continue claiming for two weeks
- Lift council borrowing caps in "high-demand areas"
- A £125m increase over two years in Targeted Affordability Funding for Local Housing Allowance claimants in the private sector struggling to pay their rent
- New money into Home Builders Fund
- Extra £2.7bn for Housing Infrastructure Fund
- Invest £400m in estate regeneration
- £1.1bn on unlocking strategic sites
- Stamp duty for first time buyers on properties worth up to £300k will be axed, while the first £300k on properties worth up to £500k will also be scrapped
- Three new Housing First pilots announced for West Midlands, Manchester and Liverpool
- Councils to be given the power to charge 100% council tax premium on empty properties
- Government will launch a consultation to barriers to longer tenancies in the private rented sector
- £38m for Kensington & Chelsea Council for mental health and counselling services, regeneration projects in areas surrounding Grenfell Tower and a new community space
- Invest in five new garden towns
- £125m increase in Targeted Affordability Funding for Local Housing Allowance claimants in the private sector struggling to pay rent
