Budget measures criticised for lack of focus on affordability

Brendan Sarsfield, chief executive of housing association Peabody, had been among a group of housing associations to directly pitch a proposal for £100bn of funding to build new intermediate rented housing to Number 10 and the Treasury.

The pitch was not included in Mr Hammond’s Budget, despite a suggestion from communities secretary Sajid Javid in October that the government may support it.

Mr Sarsfield said: “We’ve got to welcome the priority given to housing [but] affordability is an issue for a very high percentage of people, and by not focusing on it you’re excluding them from the solution.

“There’s quite a high percentage of young people who can’t access any housing market beyond a shared room at the moment and we need solutions for them.”

Mick Sweeney, chief executive of Radian, added: “I don’t think there’s anything in terms of boosting the supply of new affordable homes, particularly. The overall problem with the budget is that the lead-up led us to believe that we were looking at fixing a broken housing market and increasing output from 200,000 to 300,000, yet there’s no long-term plan, there’s no long-term strategy. What we’ve got is a whole list of detailed initiatives, which, taken together, fall short of the strategic approach that we were led to expect from Theresa May’s party conference speech.”

Stephen Teagle, chief executive of Galliford Try Partnerships, added: “While the chancellor’s opened his bag and pulled out some tools, those in themselves are not going to be sufficient to lift supply to 300,000. I don’t think it’s sufficient in affordability terms to significantly improve access to homeownership for young people.”

However, the Treasury did confirm to Inside Housing on Wednesday that an £8bn programme of guarantee-based funding could be used for affordable homes.

Mr Hammond promised “£8bn of new financial guarantees to support private housebuilding and the purpose-built private rented sector” - the largest chunk of his £15.3bn.

A Treasury spokesperson confirmed a consultation on this scheme would consider whether it could fund affordable housing as well.

A government guarantee scheme for affordable homes run by Affordable Housing Finance has been extremely popular in recent years, while a similar scheme for private homes has had far less take-up.

Councils welcomed the announcement of £1bn of extra borrowing power, but said the cap on borrowing should be entirely lifted.

John Bibby, chief executive of the Association for Retained Council Housing, said: “We would have much preferred an overall lifting of the Housing Revenue Account debt caps but nevertheless this announcement is extremely welcome. Our concern is that the opportunity to bid is likely to be limited to councils within as yet to be defined areas of ‘high affordability pressure’. The government need to define what it means by this as quickly as possible.”