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25/11/2015

Comprehensive Spending Review: Osborne announces ‘ambitious’ housing programme

Words: Laura Edgar

Chancellor George Osborne has announced in the Comprehensive Spending Review measures directed at addressing a “crisis of home ownership in our country”.

Osborne also confirmed cuts to be made to various Whitehall departments, including the Department for Transport (DfT).

“It sets out the most ambitious plan since the 1970s to build homes that support working people in their aim to buy their own home” – Comprehensive Spending Review

The spending review includes a promise to double the housing investment to “support home ownership” from 2018-19 to deliver at least 400,000 affordable homes. This includes:

  • 200,000 Starter Homes, which will be sold at a 20 per cent discount compared with market value to young first-time buyers. A £2.3 billion fund to support up to 60,000 of these will be created, in addition those delivered through “reform of the planning system”.
  • 135,000 new Help to Buy Shared Ownership homes. This will allow, according to the spending review document, more people to buy a share in their home and buy more shares over time, as they can afford to do so. The scheme is open to households earning less than £80,000 outside London, and up to £90,000 in London.
  • 10,000 Rent to Buy homes. This is in addition to 50,000 affordable homes from existing promises.
  • At least 8,000 specialist homes for older people and people with disabilities.

All sectors will be required to play a role in the delivery of these homes; therefore the government will “remove constraints that prevent private sector organisations from participating in the delivery”.

Osborne also raised the government’s manifesto commitment to extend the Right to Buy to housing association tenants, giving 1.3 million households “the opportunity to become home owners”. A pilot scheme will be run with five housing associations to “inform” the final scheme.

The chancellor is going to bring forward “further reforms of the planning system”. The spending review documents state the reforms includes a new delivery test on local authorities to “ensure delivery against the number of homes set out in local plans”.

Public sector land with a capacity for 160,000 homes will be released and brownfield sites located in the green belt will now be developed in the same way as other brownfield sites, “providing it contributes to starter homes, and subject to local consultation”. Additionally, £2.3 billion will be made available in loans to help regenerate large council estates and invest in infrastructure needed for major housing developments, while £310 million will be invested into the delivery of Ebbsfleet.

Janet Askew, president of the RTPI, said: “Putting housing at the heart of the country’s economic planning is good news, but the focus on overall numbers, when we need balanced communities in our cities and towns, is worrying. We need a range of different housing types which are affordable to rent and to buy. We also need to be realistic regarding the ability of local authorities’ planning teams to deliver these housing initiatives under the current funding arrangements.”

The drive to build, Askew continued, presents a “good opportunity” for city, county and district leaders to ensure that planning is at the heart of what they do and is “integrated with transport, health, environment and business to ensure not just housing, but economic growth and social wellbeing are delivered holistically for people”.

Infrastructure

Osborne also detailed how the government will invest over £100 billion in infrastructure.

Transport investment is to be increased by 50 per cent to £61 billion over the Parliament, including starting the construction of High Speed 2, while £13.4 billion will be spent on the Roads Investment Strategy. More than £5.4 billion will be spent on road maintenance, according to the document.

Spending on “energy innovation” is to be doubled and £250 million will be invested into a nuclear research and development programme. Better transport, including the electrification of the Trans-Pennine, Midland Main Line and the Great Western Line, will be invested in to “better connect the North”, totalling £13 billion over the Parliament.

Other measures announced

Osborne said the government is working with Cardiff Capital Region and the Welsh Government to deliver the area a city deal, with the spending review committing in principle to an infrastructure fund. Additionally, a city deal for Glasgow and the Clyde Valley is “well under way”.

The Department for Communities and Local Government will need to make resource savings of 29 per cent by 2019-20 “through better financial management and further efficiency”, but more than £20 billion of growth capital investment over the next five years is aimed at supporting housing and local growth.

The Department for Transport will have to make resource savings of 37 per cent by 2019-20.

A £12 billion Local Growth Fund will be delivered, while 26 new enterprise partnerships, including the expansion of eight zones on the current programme, will be created.


The full Comprehensive Spending Review can be read here.

Response to the CSR can be found here:

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