Matthew Henderson
Associate Director, Residential Research
While housing was recognisably absent from Jeremy Hunt’s Autumn Statement, there were a few measures which may have an impact on the housing market more broadly, which we explore in this update.
On 22nd November, 2023, the Chancellor Jeremy Hunt gave a summary of “110 measures for growth” with the aim of continuing to drive down inflation as well as “reducing debt, cutting taxes and rewarding work”. While housing was, once again, placed on the back-burner and only fleetingly mentioned, there were a handful of measures that may impact housing more broadly. We’ve simplified the take-away points below, but for the full Autumn Statement please visit the government website.
Ensuring economic stability
Minimising debt and spending are essential to controlling inflation, keeping mortgage rates affordable and funding public services sustainable. Driving inflation down with the aim of reducing interest rates should produce a stabilising effect on the housing market in the medium to long term.
Mortgage Guarantee Scheme extension
The extension of the Mortgage Guarantee Scheme, which supports the availability of 95% loan-to-value mortgage products, until the end of June 2025 is expected to help prospective borrowers with smaller deposits buy a home. This scheme was due to close for new accounts at the end of 2023. This extension of 18 months could stimulate demand in the housing market and support house price growth and ability to purchase in the short term but could also place upward pressure on prices make them unaffordable for others.
Investment in Housing and Planning
The Department for Levelling Up, Housing and Communities is bringing forward plans for authorities to offer guaranteed accelerated decision dates for major developments in England for a fee, and ensure refunds when deadlines are not met while limiting the use of extension of time agreements. The government’s investment of an additional £32 million across housing and planning should unlock thousands of homes across the country. Coupled with additional funding (£5 million) to tackle planning backlogs in Local Planning Authorities (LPAs) as well as reforms to streamline the system could lead to an increase in the supply of housing. An additional £110 million has also been allocated to support LPAs to deliver high quality schemes to offset nutrient pollution, in order to unlock planning permissions that are otherwise stalled.
Permitted Development Rights
Consultation on a new Permitted Development Right for subdividing houses into two flats without changing the building’s façade will take place in the new year. Some commentators have argued that this will help in the supply of appropriate housing for downsizers within their communities, as well as potentially injecting much needed supply into the private rental sector. However, it is unlikely to have considerable impact on housing delivery while the ability to convert a house into flats isn’t a major hurdle for developers.