What are the key Autumn Statement pledges for new homes?
New homes got some decent airtime in the chancellor’s Statement, while the Office for Budget Responsibility forecasts shed light on future net housing delivery and transaction levels.
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The key pledges encompassed planning applications, nutrient neutral housing development, new urban quarters across three cities and a new Permitted Development right.
On the first point, the chancellor said he would reform the planning system to allow local authorities to “recover the full costs of major business planning applications in return for being required to meet guaranteed faster timelines”.
If they fail to meet the timelines, their fees will be refunded automatically with the applications being processed “free of charge”.
The term ‘business’ planning application is ambiguous but could include all applicants who are a business including housebuilders, but not households.
Nutrient neutral housing schemes
The other announcements were also light on detail. In total, the government has earmarked £592 million towards new housing development. This includes delivering high quality nutrient mitigated housing schemes (£110m), unblocking planning to develop new housing quarters in Cambridge, London and Leeds (£32m) and topping up the Local Authority Housing Fund (£450m).
On top of this, the chancellor has announced an additional £3bn in funding for housing associations under the Affordable Homes Guarantee Scheme. He said this will help the scheme deliver 20,000 new homes, as well as improve the quality and efficiency of “thousands more”.
It remains to be seen what impact this will have in terms of housing delivery and how successful the government is in unlocking nutrient neutral schemes.
Finally, the new Permitted Development (PD) right to allow any house to be converted into two flats was a surprise development but could be seen as attractive for property owners as an investment opportunity and provide a chance for older residents to downsize while staying in their communities.
Office for Budget Responsibility breakdown
There were also standout details to be found in the policy costings and economic forecasts issued by the Office for Budget Responsibility (OBR).
Notably, the OBR has predicted that net housing delivery will fall for the next three years, while housing transactions will not return to pre-pandemic levels of growth until early 2027.
The OBR has predicted that net housing delivery will fall this year by 10% to 236,400 homes and that output will fall below 200,000 in 2025. The last time it slipped below this level was back in 2014.
The OBR expects that housing delivery will continue to decline for three years straight before picking up slightly after 2025.
The previous peak in UK Housing was in 2019 when output reached 298,500 homes.
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