Osborne chooses housing

Osborne chooses housing

Make no mistake – today’s Comprehensive Spending Review was, overall, good news for housing. We’ve been calling on the Chancellor to do much, much more to increase house building ever since the 60% cut to the budget in 2010. You can do so too, here. Today, that cut was finally reversed as the budget for the three years 2018-2021 was roughly doubled.

This is welcome  – given some pretty toe-curling rumours going around in the run up to today’s announcement: that the entire house building budget would be scrapped, that housing associations would be privatised, that existing social homes would all be sold off or given away. Happily, none of these have happened. Instead we’re promised a significant increase in government investment in new homes – which will finally be treated as part of the nation’s vital infrastructure.


Less positively the bulk of this investment will be going towards homes to buy, with little or nothing for those on lower incomes facing the brunt of our affordable housing shortage. This is a major flaw in the plan, but is hardly surprising, as it’s in keeping with the Conservatives’ election manifesto and other recent announcements. That said, it’s still better than it might have been. We’re very concerned that Starter Homes (for sale at 20% off the market rate) will be totally unaffordable to most people – but at least this is not the only product the CSR will fund. There will be increased funding for Shared Ownership too, and while this is still not affordable for around half of the country, it’s better than Starter Homes, as at least the public investment is preserved for future generations. And there was also a small commitment to pilot a ‘Rent to Buy’ product – something we’ve long thought has potential for those who cannot afford to buy under the existing schemes.

We’re also pleased to see the Chancellor recognising that the housing market is not a level playing field. Buy to Let landlords, and wealthy second home buyers, have huge advantages over Britain’s hard pressed first time buyers. The total value of Buy to Let mortgages on new home purchases has increased by 40% over the last year alone. Osborne’s plan to increase Stamp Duty on these buyers is a good idea, especially as he’s explicitly promised to use the revenue to support new building.

Finally, it seems that the Homelessness Prevention Grant has been spared the axe: this provides vital support for local authorities to help people facing homelessness, and there were fears it might go.

It’s not all good news though. There’s a worrying cut to the housing benefit that social tenants will be able to claim from 2018, which will hit some vulnerable tenants hard – potentially making it impossible for them to get a secure, low rent home at all. And there’s a technical change to the way that Temporary Accommodation is paid for that could increase the strain on a part of our housing safety net that’s already under intolerable pressure. We’ll need to analyse these proposals in detail, and will be keeping a careful eye on developments.

And of course, there are still plenty of damaging things in the Housing and Planning Bill going through Parliament as we speak. Most importantly the forced sale of existing council homes on the open market is a totally unwarranted attack on genuinely affordable homes to rent, and one that we will continue to fight. But at least the Chancellor seems to have found new money to support today’s house building pledges, rather than relying on yet more sell offs of the homes we already have.

All in all, it’s great that the Chancellor has heard our calls for more investment in the homes we so urgently need. In the last three months, 23,703 people signed our petition calling him to do so.

We’ll be holding the government’s feet to the fire to honour the positive pledges made today – and continuing to campaign for more genuinely affordable homes as part of the mix.

  1. “Osborne’s plan to increase Stamp Duty on these buyers is a good idea, especially as he’s explicitly promised to use the revenue to support new building.”

    I don’t have an objection to this the increase in stamp duty, as it effects new Landlords.

    However, there is a tax bombshell for landlords. Osborne has not reversed the tax on private landlords. It means depending on people’s tax situation landlords having to pay 70% tax 80 tax or even 120% tax. (in other words running the operation at a loss). I know some tenants groups wanted landlords to go out of business, which will probably happen. However, it punishes those landlords who do pay taxes!

    Some Landlords, have tenants on housing benefit, we have been in this together with our tenants. Many of use have not increased our rents since 2007 as housing benefit has been largely frozen, even though market rents have gone up. We have to deal with the LHA system, where the rent is paid to the tenant. Then we have had housing benefit cap reduced from £26k down to £23k in London or £20k elsewhere. Housing benefit will be frozen for another 4 years. Despite all the crackdown on housing benefit, George Osborne wants landlords to go out of business, so housing benefit tenants are forced onto the streets. Landlords with housing benefit tenants will not be able to increase rents to cover the tax.

    1. A disappointing appraisal from Shelter of the budget proposals – there is an (overly positive) over-emphasis in your article on areas that Shelter campaigned about and your treatment of the proposed cap to housing benefits to LHA levels is woefully lacking in any analysis of its impact on the poorest and most vulnerable in our communities and on the organisations and charities that provide support and accommodation to them

  2. Overall a disappointing article re the effects on housing and homelessness of the spending review Shelter. An (overly positive) over-emphasis on areas that you have campaigned on and a woeful lack of any analysis of the potential impact that capping housing benefits to LHA levels will have for some of the poorest and most vulnerable people in our communities and the landlords, organisations and charities that provide access to decent safe accommodation to them

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