The UK Government is reported to be in detailed discussions over a new housing stimulus plan to the tune of £50 billion of new money.
The plan, which is expected to be unveiled at the Chancellor of the Exchequer’s Autumn Statement, according to industry publication Property Week, and is said to be the Government’s answer to the deepening housing crisis.
There’s no question that a new, easy to implement and use plan, backed by enough funding is desperately required in the UK. What isn’t clear, and won’t be for some months, is the exact detail of how this new plan will work.
Property Week’s report states that a source familiar with the situation said the plan is aiming to make £50 billion available to UK house builders. The funding should be available across the country for all projects including the private rental sector as loans and financial guarantees.
Discussions on supporting the UK’s ‘modular house construction’ sector, which is still in its infancy, are also reportedly being conducted. This process is where flats and houses are largely constructed off-site while the ground work is prepared on-site. Once both sets are ready, the pre-constructed homes then ‘slot’ in. It’s not only a modern way to build homes, but also an efficient one. The lack of a large network of factories supporting this method in the UK is a problem, however, thus prompting discussion about Government investment into the sector.
With the expected official announcement of the Government’s housing plan still some months away, there has been little openly made industry response. Home-builder shares, though, have gained support from the report and in the final days of August they shrugged off the last of any Brexit-related woes.
Berkley Group, Taylor Wimpey, Barratt Homes and Bellway all made gains in the days following the initial report. Shares of home builder Persimmon were also upbeat, buoyed not only by the news, but also by its own, better than expected half-yearly financial results.
“While the result of the EU Referendum has created increased economic uncertainty, customer interest since then has been robust with visitor numbers to our sites around 20% ahead year on year, Jeff Fairburn, Persimmon’s chief executive said in a statement. “Our private sale reservation rate since 1 July is currently 17% ahead of the same period last year. The Group is now trading through the traditionally slower summer weeks but customer demand remains encouraging and we anticipate a good autumn sales season.”
Amid this potentially good news for the UK’s housing crisis, recent news on the UK’s housing and planning minister Gavin Barwell, has been less favourable. A report in The Independent points out Mr. Barwell’s central role in encouraging Croydon council to shelve a proportion of plans for around 500 new homes there.
However, while this may suggest Mr. Barwell isn’t as stoic a supporter of building more homes in the UK as he consistently claims he is – and indeed his shadow cabinet opposition has accused him of Nimby-ism, among other things – Mr. Barwell told the paper those claims were “absurd”.
Mr. Barwell said then and now, that the issue against the proposed plans for Croydon were that the plans were for Metropolitan Open Land in a single area of Croydon.
“The idea that I’m against housebuilding is absurd,” Barwell told the Independent. “I do feel very strongly that unless there is literally no alternative we shouldn’t be building houses on greenbelt or Metropolitan Open Land.”
With so much at stake, it appears this year’s Autumn statement will be more closely watched than usual.