The Autumn Budget had many positives for the housing sector. The headline number of 300,000 net additional homes each year from the mid-2020s is particularly good news. The following measures stood out for me as significant:

•The expanded role (and potential extra resource) for Homes England.

•The £1 billion of extra debt headroom to be made available to councils in ‘areas of high affordability pressure’ by 2021/22, which recognises the contribution local authorities can make in increasing housing supply.

•The changes to Universal Credit and the relaxation of Local Housing Allowance rates in some areas.

An important part of the mix is the powerful role for Homes England in facilitating housebuilding. When combined with the recently announced rent settlement of Consumer Price Index (CPI) plus 1 per cent from April 2020, the abolition of the plan to cap housing benefit for social tenants at Local Housing Allowance rates and the new housing association deregulation measures, the additional resources should see the construction of thousands more homes.

Savills research has shown that if councils were allowed to manage their own Housing Revenue Accounts within the local authority Prudential Code, this could create capacity for an extra 15,000 homes across England.

While structural changes are needed to enable councils to make use of the additional borrowing, the £1 billion may encourage those with existing headroom to use it. If this additional borrowing can be combined with right to buy receipts, other forms of funding and the potential for joint ventures with other partners to share capital and risk, this is a step firmly in the right direction.

While the Chancellor had plenty of good news, we feel there are still some important issues missing from housing policy. In particular:

• The National Housing Federation asked for public land to be sold for best social value, rather than highest price, as an enabler to increasing affordable supply, but there was no mention of this idea.
• No movement on greenbelt release and contribution to housing supply.
• The £2 billion announced by Theresa May to her party conference was reconfirmed, there was no further additional funding for housing for social rent.
• There was little reference to the importance of social rented homes as a better and cheaper alternative to the private rented sector for very low-income households.
• No mention of the issues of poor housing quality and the need for renewal alongside supply, in weaker housing markets.

Will the Chancellor hit his target of 300,000 new homes a year from the mid-2020s? That remains to be seen but the package of measures announced in November’s Budget and in recent months removes some of the barriers and gives him (and us) a decent chance.

Further information

Read more: Investing to solve the housing crisis

Contact Savills Housing Consultancy