The £1 billion six year programme to unblock new large housing development sites across the country will contribute towards housing need and will drive construction jobs, according to Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (RICS).
‘As we've been saying for a long time, the lack of housing supply is crippling the property market. However, we still believe housing is not at the centre of a coordinated property led growth that supports a balanced regional recovery where all can access the market,’ he explained.
Robert Bartlett, chief executive officer of Chesterton Humberts, said that greater assistance is needed from the Government for developers who are experiencing difficulties in progressing development sites with consent. ‘With housing demand set to increase, increasing the supply side of the market is the most effective way to contain price growth,’ he pointed out.
According to Peter Williams, executive director of the IMLA, with mortgage lending on the rise, it is time to redouble construction efforts to marry up supply and demand. ‘The decision to offer a further £1 billion to unblock housing projects will help to encourage growth on a national level, but continuing private investment will be needed and on a far greater scale to avoid a permanent decline in home ownership,’ he added.
Guy Ackernley, head of residential in Jones Lang LaSalle's Leeds office, said it will be a boost for northern cities such as Leeds and Manchester.
‘Government initiatives have helped deliver a stronger fillip to the Northern England housing market than would otherwise have occurred and I welcome news that the Chancellor has acknowledged it needs to do more to encourage development and unblock housing sites in vibrant centres such as Leeds and Manchester,’ he explained.
‘Leeds city centre has been starved of new build residential activity over the past five years and a lack of stock continues to be an issue for would be buyers. With two major planning applications submitted in the city centre recently, combined with today's announcement, we will hopefully see more developers perceive the time is now right to put spades in the ground once again,’ he added.
Michael Hill, director of Countryside Properties' regeneration south division, said the move should help address the acute shortage of homes across all tenures and the contribution it makes to jobs and the economy.
Stuart Law, chief executive officer of Assetz, said that it will boost the northern property market where the property recovery is already underway and creating homes and jobs will increase the speed of recovery.
But Robin King, director of Move with Us, the funds will predominantly benefit northern cigties and will not be enough to counter the problem. 'There needs to be a serious increase in housing stock, particularly in areas surrounding London. There should also be an injection of investment in the supply chain businesses because until they start to invest in expanding production to supply more bricks, blocks and plasterboard, the market will be somewhat restricted,' he pointed out.
There was also positive reaction to Osborne’s continued commitment to the Help to Buy scheme which is credited with boosting the property market.
‘The news that the Chancellor is continuing his support for the mortgage market despite the mortgage element of Funding for Lending being discontinued last week, is fantastic news for aspiring buyers,’ said Robert Bartlett, chief executive officer of Chesterton Humberts.
‘The withdrawal of too many support schemes all at once will almost certainly reduce the volume of house sales and will have a further impact on associated businesses within the construction, building and household trades. Housing transactions are still critical in generating a consumer recovery and growth within the overall economy,’ he added.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), pointed out that Osborne’s confirmation of new powers for the Bank of England to control asset price inflation makes clear that the mortgage market will not be left entirely to its own devices as it recovers.
‘Both government and bank now have housing and mortgages firmly in their sights and this puts a considerable responsibility on the industry. The Bank itself must now take care to ensure further interventions are based on good evidence and do not to stifle a recovery that is yet to be realised in full,’ he explained.
However, some experts expressed disappointment that Osborne did not address the issue of stamp duty in his Autumn Statement. ‘Long overdue changes to stamp duty have been ignored, particularly as the amount of revenue generated from this is rising sharply,’ said Simon Rubinsohn, chief economist of RICS.
‘The government plans to collect more than £60 billion over the next five years in stamp duty receipts from British householders. Moving away from stamp duty brackets to a marginal system would be a boost to those struggling with the cost of living and help boost the number of property transactions. This will remove the so called dead zone created by the previous structure which saw a dearth of properties on the market between £250,000 and £270,000,’ he explained.
Robert Bartlett, chief executive officer of Chesterton Humberts, was also disappointed but said that perhaps it is being saved as a pre-election sweetener next year.
The Federation of Master Builders (FMB) said Osborne also missed the chance to reverse decades of underinvestment in Britain's ageing housing infrastructure by not implementing a reduced rate of VAT on domestic renovation and repair.
‘The Chancellor has missed an opportunity to reduce VAT on housing renovation and repair. This would deliver an instant economic fillip to millions of households that are struggling with the ever increasing cost of living and give Britain's builders the boost they need to capitalise on the recovery,’ said Brian Berry, chief executive of the FMB.
‘House holders need more help to combat the rising cost of heating their homes and lowering the rate of VAT charged on all housing renovation and repair would do this at a stroke. For example a 15% reduction in the rate of VAT on insulation and double glazing would represent a significant saving to the customer, and empower home owners to protect against spiralling energy bills. Switching tariffs can defend against shock price rises in the short term, but only by making your home more efficient can you arrest, or even reverse, the seemingly inexorable rise in the cost of energy,’ he added.
