Sector dismay as Budget ignores supply

Coming just a day after thousands marched on Westminster calling for ‘Homes for Britain’, the Budget was seen by many as an insufficient response by the government to the housing crisis.

The only major new housing funding announcement was the creation of a ‘Help to Buy ISA’ – under which first-time buyers have their savings topped up by a maximum £3,000 by the government to help them buy a house.

Tony Stacey, chair of the Placeshapers group of 100 housing associations, described the Budget as a ‘pathetic response’. He said: ‘This is a measure that will only help one section of society that is in distress and it will also push up house prices.

David Montague, chief executive of 70,000-home L&Q , said: ‘At the rally, it felt like the tectonic plates had shifted. Politicians said they were committed to solving the housing crisis – that’s not what we saw in the Budget.’

Both the Chartered Institute of Housing (CIH) and the National Housing Federation (NHF) were scathing about the budget. David Orr, chief executive of the NHF, said the Help to Buy ISA was ‘another short-term initiative’ and ‘not a Budget to end the housing crisis’. The Help to Buy ISA scheme will cost the government £2.1bn over five years. The NHF said the same level of investment would have enabled housing associations to build 69,000 affordable homes.

Gavin Smart, chief executive of the CIH, said: ‘While the ISA may help some first-time buyers to overcome barriers to home ownership, it fails to address the fundamental problem – that we are simply not building enough homes.’ In 2014, according to the National House Building Council, there were just 145,174 new homes registered – significantly lower than the estimated 210,000 new households the Office for National Statistics predicts are being formed a year.

The Budget also confirmed more detail about housing zones outside of London and repeated a pledge to set up a London Land Commission to map brownfield land.

The government said it is to commission a feasibility study on rolling out large-scale public sector commissioning of homes. This followed confirmation in December that the government is piloting direct building of homes on a 10,000-home site in Northstowe.

It announced measures to devolve more planning powers to the mayor of London and plans for a ‘study into the challenges faced by some of the largest housing estates in the Midlands’.

The Budget document also revealed the government will examine whether improving housing can reduce costs to the National Health Service.