Chancellor confirms £5bn of housebuilding investment next year
Rachel Reeves has said the government will invest £5bn in housing next year as she announced a number of measures intended to boost housing delivery towards the Labour administration’s target of building 1.5 million homes over the next five years.
The chancellor, in a Budget in which she pledged to “invest, invest, invest” confirmed the government will increase the Affordable Homes Programme’s budget by £500m next year to £3.1bn.
She also pledged to provide £3bn of support to SME housebuilders and the build-to-rent sector in the form of housing guarantee schemes which allow developers to access lower cost loans.
Reeves said: “We committed in our manifesto to build 1.5 million homes over the course of this Parliament, and my right hon friend, the deputy prime minister, is driving that work forward across government.
“Today, I am providing over £5bn of government investment to deliver our plans on housing.”
Reeves also pledged to “put the right policies in place” to increase the supply of affordable housing, confirming the government’s plan to provide a five-year, CPI-linked rent settlement.
She also confirmed the government will reduce Right to Buy discounts and allow councils to be able to retain the full receipts from sales to be reinvested into new supply.
Reeves said: “By doing this, we will give more people a safe, secure and affordable place to live”.
More on the Autumn Budget 2024
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Autumn Budget 2024: key measures for construction at a glance
The government confirmed it will take forward its manifesto commitment to hire hundreds of new planning officers and provide £1bn of investment to reduce dangerous cladding from high-rise buildings.
Reeves also confirmed plans to invest £46m of extra funding to recruit and train 300 graduates and apprentices into local planning departments and confirmed an increase in stamp duty on second homes.
Key measures
- £3bn of additional support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes.
- Housing budget to be £5bn in 2025/26.
- Increase the stamp duty land tax surcharge on second homes by two percentage points to 5%. Reeves says this will support over 130,000 additional transactions from people buying their first home or moving home over the next five years.
- As announced at the weekend – a £500m ‘top-up’ to the Affordable Homes Programme to build up to 5,000 additional affordable homes.
- A consultation on a new long-term social housing rent settlement of CPI+1% for 5 years.
- Investment in remediation will rise to over £1bn in 2025-26. This includes new investment to speed up remediation of social housing. The government will set out further steps on remediation later this autumn.
- Reduced discounts on the Right to Buy scheme and councils in England enabled keep all the receipts generated by sales.
- Additional £1bn from next year to extend the household support fund and discretionary housing payments “to help those facing financial hardship”.
- An initial £3.4m to ‘kick-start’ the government’s Warm Homes Plan to decarbonise homes. This includes £1.8bn to support fuel poverty schemes, helping over 225,000 households reduce their energy bills by over £200.
- £46m of additional funding to support recruitment and training of 300 graduates and apprentices into local planning authorities, accelerate large sites that are stuck in the system, and boost and upskill local planning authority capacity.
- £56m to unlock 2,000 homes at Liverpool Central Docks.
- £25m in a joint venture to deliver 3,000 energy-efficient homes across the country, 100% of which are targeted for affordbale tenures.
- £47m to support the deliver of 28,000 homes stalled due to nutrient neutrality rules.
- Pledge to increase funding for the Boiler Upgrade Scheme in England and Wales this year and next, following the high demand for the scheme. The government is also providing funding to grow the heat pump manufacturing supply chains in the UK to support the plan.
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