KnowHOW Essential reading for commercial property professionals who need to be in the know
AUTUMN STATEMENT 2016In his first address as Chancellor, Philip Hammond addressed MPs at the House of Commons to give his Autumn Statement and to set out the Government's forecast for the UK economy. In the wake of Brexit and the economic uncertainty surrounding the referendum result, Mr Hammond pulled back on his predecessor's promise to see a budget surplus by 2020, instead now aiming for a target of 2% deficit by 2020, with a balanced budget soon after.
The revised deficit forecast responds to adjusted fiscal targets in the wake of a reduced growth forecast. It also seeks to provide the flexibility needed to support the economy, allowing the Government increased investment in transport infrastructure, research development and in housing.
IN BRIEF
The key planning related measures announced by Mr Hammond are as follows:-
Housing£2.3 billion for a new Housing Infrastructure Fund;- £1.4 billion towards affordable homes provision;
- A regional pilot of Right to Buy for Housing Association Tenants; and
- The scrapping of letting agents' fees on housing rentals.
Transport£390 million to support future transport technology;- £1.1
billion to reduce congestion and towards upgrades to local roads and public transport;
- £220 million for safety measures and congestion relief on Highways England roads;
- £27 million towards an expressway between Oxford and Cambridge;
- £450 million towards the trialling of digital signalling technology on railways; and
- Investment of 1% -1.2% of GDP every year in infrastructure, governed by the new National Infrastructure Commission.
Devolution£1.8 billion from the Local Growth Fund to support the English regions, including:
£556 million to support LEP’s in the North of England
£542 million to LEP's in the Midlands and East of England
£683 million to LEP’s in the South West, South East and London;A recommitment towards City Deals with Swansea, Edinburgh, North Wales and Tay Cities;Announcement of negotiations on a new City Deal
for Stirling; andAdditional borrowing powers to support the new mayoral combined authorities.
IN DEPTH
Housing
In his Statement, Mr Hammond has placed a clear focus on housing and infrastructure delivery. This includes the announcement of a £2.3 billion fund for major infrastructure to support the delivery of 100,000 homes in "areas of high demand" and a £1.4 billion fund for the provision of 40,000 affordable homes. Support for affordable homes follows a recent release from the Office for National Statistics which showed that the delivery of affordable homes has more than halved and is at its lowest point since the collection of data in 2000.There was also mention of relaxing restrictions on Government grants to allow for
a wider range of housing types. Whilst there was no detail around this it perhaps provides some clues on the content on the upcoming Housing White Paper.Mr Hammond also announced that the Government will ban letting agents charging fees on tenants as soon as possible. Given the significant rise in people renting properties and the increase in build-to-rent schemes, this measure will be welcomed by tenants. At this point, no indicative deadline has been provided.Ultimately, the measures announced by the Chancellor are set to double the Government's annual capital spending on housing in real terms. Mr Hammond closed on the subject saying :
"This commitment to housing delivery represents a step-change in our ambition to increase the supply of homes for sale and for rent, to deliver a housing market that works for everyone."It is clear that the devil will be in the detail, particularly when the meat is put on the bones of the Housing White Paper and when the committed funds begin to be invested on the ground. Transport and InfrastructureThe mooted £390 million future transport pot will fund new research into cutting edge technologies including driverless cars, the development of at least 550 new electric buses and additional charging points for electric vehicles.With regards to the remainder of the transport related spending measures, Mr Hammond did not announce specific measures, with Transport Minister, Chris Grayling, likely to flesh out key priorities in the coming weeks.There was also a nod to the Northern Powerhouse, the pet project of Mr Hammond's predecessor, with the Chancellor announcing that the Department for Transport and Transport for the North were working together in developing detailed options for Northern Powerhouse Rail.Devolution Unlocking funding from the Local Growth Fund into North West LEPs will be welcomed by business in the North
West. This will provide a boost to the localism agenda but it remains to be seen how these funds will be spent in practice. Also, giving new borrowing powers to the new metro mayors will provide added autonomy, however, detail remains vague on how far these new powers will extend.Omissions
Whilst there was a buzz around the new Housing White Paper, announced by Mr Hammond's colleague, Gavin Barwell, it failed to materialise - with Mr Hammond stating it will appear "in due course". Additionally, several senior figures in the North of England were hoping for mention of HS3; the proposed high speed east-west rail link from Liverpool to Hull. However, based on Mr Hammond's comments, this will be down to Transport Minister, Chris Grayling, or the new NIC.Summary
Mr Hammond's proposed investments in housing and infrastructure will be welcome news to the house-building industry, whilst mention of the Northern Powerhouse and renewed commitments to devolution are important for the continued growth of the North West. It remains to be seen if ambitious proposals for rail improvements in the North will materialise under the current regimes. As ever, it will be important to monitor the progress in the coming months, and in particular the publication of the Housing White Paper in due course. If you have any questions or require our assistance, please do get in touch.
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