The construction sector has welcomed the Government’s investment in house building as announced by the Chancellor today but concerns have been expressed that it doesn’t stretch far enough.
In his debut Autumn Statement Philip Hammond announced a £2.3bn Housing Infrastructure Fund to support projects such as road and water connections, which in turn will support the delivery of up to 100,000 new homes in the areas that are deemed to need them the most.
In addition to this there will be £1.4bn to provide 40,000 new “affordable” homes and a further £1.7bn will be used to speed up the construction of new homes on public sector land.
The Housing Infrastructure Fund is good news for merchants and will “help to invigorate the market by encouraging house building,” said John Newcombe, managing director of the Builders Merchants Federation, as well as helping to create jobs and growth in construction and the wider economy.
The Chancellor was right to double housing spend said the Federation of Master Builders (FMB) which also welcomed the relaxing of the timeline for deficit reduction as the right way to boost economic growth.
The investment demonstrates that Hammond understands that house building and economic growth are intrinsically linked said the FMB’s director of external affairs Sarah McMonagle.
“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 UK is to invest in our built environment,” she said.
Welcoming the Housing Infrastructure Fund she said the burden of local infrastructure for new housing should not fall entirely on private house builders and key to the fund’s success will be ensuring that it focuses on unlocking large numbers of small sites and not just large sites.
Looking forward to the Housing White Paper, McMonagle hopes for further interventions to boost housing delivery through SME house builders, including a presumption in favour of smaller scale developments.
Mark Farmer, chief executive of construction and real estate consultancy, Cast, and author of the recent ‘Modernise or Die’ report into the construction labour shortage, said: “It is good to see new housing and infrastructure receiving the focus so desperately needed in the Autumn Statement. It is particularly pleasing to see the increased commitment to the National Affordable Homes Programme, which is a specific recommendation of my recently published government review of the construction market.
“A tenure diverse housing market including affordable rent and shared ownership is crucial to underpinning more stable long-term demand in construction and can also act as a catalyst for investment in innovation for house building which ultimately will reduce delivery costs.”
The measures in the Autumn Statement will be welcomed by small house builders as they struggle to overcome the challenges of the current planning system, skills shortages and uncertainty over how Brexit negotiations will impact on their business said Frank Pennal, CEO of the property division at Close Brothers and should “help accelerate construction and remove some of the hurdles faced by smaller house builders, allowing them to unlock their potential and contribute to vital UK housing development.”
But Russell Gardner, head of real estate at EY, said that while the measures to address the UK’s housing supply crisis are welcomed the funding doesn’t stretch far enough and the investment must represent the start of a major commitment to building significantly more homes across the UK.
“The headline numbers are eye-catching but it requires a stretch of the imagination to believe that new homes supply can be unlocked for £23,000 each or an affordable house can be built for £35,000. We eagerly await the Housing White Paper and hope it contains more radical structural proposals,” he said.
Matt McNab, executive director, buildings at Ramboll welcomed the extra funding but said questions remain over timescales and methods of delivery. The practical impact of the funds won’t be seen until the release of the Housing White Paper, he said.
Tom Shaw, director, buildings at Ramboll, added: “We need to do more than simply increase funding, but concentrate on encouraging the industry to explore methods of building and construction that will enable homes to be built at a lower cost and in shorter periods of time.”
While Kate Bailey, chair of Policy and Communications Committee at the Landscape Institute commended the cash boost she said housing quantity cannot be divorced from housing quality.
“People want to live in desirable housing,” she said. “One way of overcoming public opposition to new house building is to commit to high-quality landscape in every new development. If we are to increase housing density as the Government intends and if one outcome is the provision of generous and attractive green spaces and amenities, then hopefully this new housing will be more acceptable to existing communities.”
Keith Aldis, CEO of the Brick Development Association, agrees that the focus must be on quality houses that are sustainable as opposed to cheaper houses in greater density and said the Chancellor must turn his promises into reality, and breathe life into a turbulent sector.