Borrowing plans to invest more in new housing, national and local roads, flood protection, and grammar schools were revealed when the Chancellor of the Exchequer, Philip Hammond MP, gave his first Autumn Statement to Parliament on Wednesday, 23rd November.
The speech can be read here whilst the forecasts from the Office for Budget Responsibility which underpin the Autumn Statement can be seen here.
Below, PBM presents the responses from a number of industry bodies and businesses, starting with the Builders Merchants Federation (BMF):
On housing, the BMF described a ‘noticeable shift in emphasis’ from home ownership to helping housing providers to deliver a mix of affordable homes to rent and to buy. The extra £1.4 billion allocated for 40,000 new builds between now and 2020-2021 is very welcome.
The Chancellor has correctly identified it is often disposal of under-used land, site clearance, or the proximity of road and utilities needed, that are obstacles to housing completions. Announcing a £2.3 billion Housing Infrastructure Fund to deliver 100,000 new homes — with a further £1.7 billion allocated to accelerate building on publicly-owned land in England — is also good news.
John Newcomb, BMF Managing Director, said: “The Chancellor has signalled clear policy intent by doubling the annual capital spend on housing between now and 2021. This tells us that, as a former property developer himself, he fully understands the direct link between housebuilding and output and employment that creates local growth and national prosperity.
“Mr Hammond made no mention of existing schemes such as Help To Buy. That is understandable because in a few weeks, the Government will publish a Housing White Paper. But my message to the Chancellor and fellow ministers is clear — there is a great deal to be done to build many more new homes to ease today’s housing crisis.”
In his speech, Mr Hammond said he wants a ‘housing market that works for everyone’. Adapting the Chancellor’s words, John Newcomb said he wants a building materials’ supply chain that works for everyone.
Referencing the parts of the Autumn Statement which will affect merchants’ businesses, John Newcomb commented: “Extending the freeze on Road Fuel Duty for another year is good news and something the BMF lobbies for. We hoped he would resist temptation to increase it and he has.
“Increasing the National Minimum Wage and National Living Wage was always on the cards — as was the 2% hike in Insurance Premium Tax, the second rise in the last 12 months.
On taxes, the BMF was disappointed Mr Hammond found no room in his Autumn Statement for:
- Business Rates: the ‘ask’ was to bring forward the shift from RPI to CPI uprating to next year.
- Stamp Duty: the ‘ask’ was to ease Stamp Duty to help ‘later life buyers’ move home and release large family homes back into the market.
- Capital Allowances: the ‘ask’ was to expand the eligible criteria and/or increase Annual Investment Allowance thresholds.
Federation of Master Builders (FMB)
Sarah McMonagle, Director of External Affairs at the FMB, said: “The Chancellor’s commitment to double annual capital spending on housing by 2020 demonstrates that he understands that house building and economic growth are intrinsically linked. For every £1 invested in construction, £2.84 is generated in the wider economy and therefore the best way to protect ourselves from an economic wobble as we leave the EU is to invest in our built environment.
“For that reason, the £1.4 billion announced for 40,000 affordable homes is welcome, as is the £1.3 billion for roads — the latter will help improve the UK’s infrastructure and make our economy more competitive.
“The Chancellor’s £2.3 billion Housing Infrastructure Fund is welcome and could go some way to solving the housing crisis. The burden of funding local infrastructure for new homes should not fall entirely on private house builders — however, as council budgets have been stripped back, local authorities have increasingly looked to developers, including even the very smallest developers, to plug these funding gaps. Heavy demands for Section 106 and Community Infrastructure Levy can make many small developments unviable.”
Sarah continued: “Key to the Fund’s success will be to ensure that it focuses on unlocking large numbers of small sites and not just small numbers of large sites. The Chancellor wants a ‘housing market that works for everyone’ and central to this is empowering small local house builders. We look forward to the Government’s forthcoming Housing White Paper which we hope will include further interventions to boost housing delivery through SME house builders, including a presumption in favour of smaller scale developments.”
Gibbs & Dandy
Neil Lawrence, MD of Gibbs & Dandy, said: “I welcome the Chancellor confirming there will be funding for 40,000 new homes. The building and construction industry can be a real driver for economic prosperity and housebuilding play a hugely important role within the industry. My view has always been the same, which is the UK needs a true housebuilding revolution.
“Government, housebuilders, local authorities and the industry as a whole all have a role to play. It’s estimated that the need for additional housing in England alone is between 232,000 to 300,000 new units per year. That’s a level of housebuilding that hasn’t been seen since the 1970s, and is far higher than the currently level of building.
“Such an investment in housebuilding will benefit so many people, not just those looking to get on the property ladder. It will also create jobs for tens of thousands of trade professionals, including builders, joiners, electricians, plumbers, and painters and decorators, support local businesses that supply materials, as well as contribute to the local economies where properties are being built.”
The Brick Development Association (BDA)
Keith Aldis, CEO of the Brick Development Association, said: “For the construction industry, what is important is that the Chancellor breathes life into a turbulent sector. The Brick Development Association welcomes the news that major infrastructure investment will continue. Our membership is geared up to continue increases in delivery and supply chains remain strong.
“We are also happy to see that Government is addressing the issue of affordability in the interim period, and not simply waiting for supply to balance demand. We are hoping that continued, long term, investment will help to aid the chronic housing crisis. However, the focus must be on quality houses that are sustainable as opposed to cheaper houses in greater density.
“Following the statement, he must turn these promises into reality. It is great to see brick manufacturers responding so positively.”
