Every year when Spring starts we are given an update on the overall health of the economy by the Chancellor. As well as this, we are also given the Office for Budget Responsibility forecasts so we, as the public, can see an update on any progress since the Autumn budget. This year’s statement provided a significant amount of information with regard to the housing market. So, here’s what you need to know:
The Autumn budget outlined a plan, which was set out to tackle the UK’s housing problem and thus build homes that the country desperately needs but where are we at with that now? According to the Chancellor, everything is going ahead as planned. Last year, the budget laid out plans of an investment programme that would help to build homes. It stated that the government would need to spend at least £44 billion over the next five years in order to make it an average of 300,000 new homes per year by the mid-2020s. Mr. Hammond confirmed in the Spring Statement that this was happening and that more than 1 million people would benefit from the project.
As well as a general overview of plans for the housing market, the Chancellor went into details about the work he was doing with local authorities; he is currently working with 44 authorities who have bid for a share of the housing infrastructure fund. He made a deal with the West Midlands to deliver 215,000 homes by 2030-31, which will come from a £100 million grant from the land remediation fund and London is set to receive £1.67 billion in order to start building 27,000 affordable homes by the end of 2021-22, a highly anticipated announcement given the state of London’s housing situation.
Another financial input being supported by the Chancellor is the House Growth Partnership, which provides financial aid for housebuilders and this fund will be more than doubled to £220 million. As well as outlining future plans for the UK’s housing problems, the Chancellor did not forget to mention the progress on the stamp duty relief introduced last year.
Last year, the government abolished stamp duty tax for properties under £300,000 as well as on the first £300,000 of properties worth up to £500,000. The aim was to help first time buyers but has it really worked? Mr. Hammond seemed to be positive about the changes to stamp duty tax as he claimed that an estimated 60,000 people have benefited from the change. The statistics on this are still a little unclear but it seems as if there have been some benefits even if the money saved by first time buyers is a small amount.
Overall, the Spring Statement was met with positivity with regard to the housing market as well as hopeful forecasts on borrowing, debt and growth. We shall have to wait and see if the plans come to fruition in the near future.