Philip Hammond’s attempts to crack the housing crisis have been welcomed - but experts claim it won't end the nation's problems.
In this afternoon’s Autumn Statement the Chancellor of the Exchequer pledged £2.3bn towards building 100,000 new homes in areas of high demand.
He said the money would be spent on upgrading infrastructure so more homes could be built.
Meanwhile £1.4bn would be invested to deliver another 40,000 additional affordable homes.
Stephen Smith, director of Legal & General Housing Partnerships, said: “This decision is a welcome first step in rebuilding the fragmented sector. However, this act alone will not solve our housing crisis.
“The additional funding will hopefully go some way towards helping the government achieve its build target of one million affordable homes by 2020 and will encourage a collaborative effort from the government and house building associations.”
Jonathan Sealey, chief executive of bridging loans provider Hope Capital, said 40,000 homes was "a drop in the ocean" when the target is to build one million by 2020.
According to a recent survey, Mr Sealey said we need to build 685 new homes every day to even meet the current shortfall of 915,000; with existing delivery rates at 475 per day.
He said: "The plain fact is that with the best will in the world we are nowhere near our target. Perhaps rather than just pledging money to help, the government should be looking at the reasons why?
"We can but hope that the promised white paper will provide solutions to the age old question - how can we build more homes to meet demand?
“We all had high hopes that the Chancellor would tackle the one thing that many believe is killing the market; but disappointingly stamp duty was again conspicuous by its absence.”
Mark Hayward, managing director of the National Association of Estate Agents, agreed: “The measures announced during the Autumn Statement today to boost house-building go some way to making the housing market work for everyone, but quite frankly do not go far enough.
“The government has a long-standing history of announcing numerous house building pledges, but in the last few years, we’ve not seen a sufficient impact on supply to make a dent in providing the affordable homes we really need.”
He said the production of a white paper on the long-term challenges for the housing market could prove crucial.
Aberdeen Asset Management property fund manager Ed Crockett said: “The additional funding for housing is certainly positive. But it needs to be channelled in such a way that it makes renting more affordable for those struggling to get by.
“It also needs to be provided in such a way that will actually encourage more institutional investors to invest.
“We have these massive pools of capital that have been standing on the sidelines for years now, ready and willing to commit but lacking the right platform. Today is a step in the right direction.”
He added that the extension of Right to Buy to housing association tenants was a “red herring” because it would only benefit those lucky enough to be in such a home.
Mr Hammond also said the government would ban letting agents from charging fees to tenants, saying they had “spiralled out of control” and that landlords who appoint should pay their fees.
Mr Smith said: “Contrary to initial speculation, the implementation of this policy in Scotland in 2012 does not seem to have had a negative impact either on rents or on the availability of private rented accommodation.
“We therefore hope the roll out in England and Wales will be as successful.”
A number of industry figures said references to stamp duty were conspicuous by their absence.
Russell Quirk, the chief executive of eMoov, said: “Stamp duty is an archaic tax and one that the industry has been crying to be changed in a manner that benefits UK buyers.
“Rather than penalise struggling UK buyers the government needs to flip stamp duty on its head and make the seller accountable for paying it.
“This would help those buyers already paying the price of homeownership, whilst those that have benefited from the appreciating price of their property are in a better position to stomach the sour taste of stamp duty tax.”
damian.fantato@ft.com
