In what would be significant ramping up of UK housing supply, the government will set out plans for building 300,000 homes a year in this Wednesday’s Budget, the chancellor of the exchequer has said.
"It is not acceptable that so many fewer young Britons are able to own a home now," chancellor Philip Hammond told the BBC’s Andrew Marr Show yesterday. "It is not acceptable that there are not enough properties to rent and that rents are sky high. The answer is that we have to build more homes."
Hammond did not make any specific financial commitment, and did not comment on last month’s call by communities secretary Sajid Javid for £50bn to fund a house-building programme.
However, he warned that there was no "magic bullet" to increase housing supply and the government would not simply "pour money in", reports Construction Manager.
"We are delivering planning permissions at record numbers, actually we are delivering homes at record levels – 217,350 last year," he said.
Over the past four decades annual new home supply in the UK has fallen steadily from more than 300,000 on average in the 1970s to below 160,000 in the early 2010s, all while the rate of population has increased.
"The challenge is affordability," said Hammond. "Experts agree that to start to make inroads on the affordability problem, we have got to be sustainably delivering 300,000 homes a year on average across the housing cycle, and that’s a big step up from where we are now."
"There’s no magic bullet, it’s not just about the government borrowing money," said Hammond. "If you pour money in without fixing the other elements of supply, you will just create more house price inflation, making the problem worse not better."
The chancellor also said he will provide more help for SME builders, by getting local authorities to allocate pockets of land to small developers and guaranteeing bank loans to smaller house builders.
Further plans expected to be announced by Hammond on Wednesday include government financing for the clean up of polluted industrial sites for house building, and speeding up developments where planning permission exists, using the "powers of state" where necessary.
Image: Annual new home supply in the UK has fallen from more than 300,000 on average in the 1970s to below 160,000 in the early 2010s (Home Owners Alliance)