Housing Pledges in 2020 Spring Budget

By Kasia BanasAccount Director  

With the budget focused on the response to the Coronavirus crisis, the Chancellor Rishi Sunak did not have much space left for housing announcements, something the industry has got used to over the years.

The key pledges consist of a £12bn extension of the Affordable Homes Programme, a £1bn Building Safety Fund to remove unsafe cladding from buildings and £650m of funding to help rough sleepers into permanent accommodation. A total of £1.1bn of new allocations through the Housing Infrastructure Fund have been confirmed, to open up 70,000 homes in areas of high demand across country. There will also be a new £400m fund for regions to build on brownfield sites. Interest rates for loans from the Public Works Loan Board, which are used by councils for housebuilding, will be cut by 1%, making £1bn available.

The initial response from the sector has been mildly positive. Voices from the Chartered Institute of Housing, National Housing Federation or Shelter have all welcomed the announcements but stressed that this only the beginning and much remains to be addressed. They also pointed out that the devil is often in the detail and the real impact of these pledges will not be known until they’re put into practice.

The Chancellor also announced reforms to the planning system, which were presented the following day by the Housing Secretary Robert Jenrick. In his statement to the Commons, Jenrick set out his vision for getting the country to build more homes more quickly, and which fit into local design standards. The announcement coincided with the publishing of the Planning for the Future document, setting out the new policies.

New permitted development rights for building upwards on existing buildings will be introduced by Summer 2020 and consultation on extending them to allowing vacant buildings to be demolished and replaced with new homes is to take place. Mr Jenrick pledged to support community and self-build housing schemes as well as the use of compulsory purchase orders by local authorities. In efforts to support the Oxford-Cambridge arc, he is setting up a new spatial framework for the area and forming four development corporations across the area.

To incentivise more building urban areas, there will be yet another review of the method for calculating local housing need. Local authorities were also given a deadline of 2023 for having an adopted local plan or they will face intervention, something that Mr Jenrick has already done in South Oxfordshire. Pass rate for the Housing Delivery Test will be raised to 75% in November 2020 and local authorities that build more homes will have access to greater funding from the New Homes Bonus.

There will also be a revision to the National Planning Policy Framework (NPPF) with a stress on good design and placemaking throughout the planning process. In response to the Building Better, Building Beautiful Commission’s report, the calls for urban tree-planting and community-led design will receive his backing through implementation of a new National Design Code.

We can expect further details in the white paper, expected later in the Spring. Whilst many will say that these announcements are not taking the reforms far enough, the government is in a tough spot of trying to incentivise more building whilst facing the climate emergency. As in the case of Heathrow’s third runway, many housing and infrastructure project will undoubtedly see a lot of pushback from the increasingly environmentally aware public. The goal of introducing the 80% lower carbon emissions target for new homes will be the first one to be criticized for lack of ambition.