Autumn Statement: Chancellor rolls out all the old clichés in his quest to save home ownership

Some forewarned that today’s Autumn Statement would sound the death knell for social housing but as it turned out, the Chancellor of the Exchequer forgot to ring the bell – he was too busy setting out his “bold plan” to save home ownership.

As it is, in terms of the death of social housing, the deed has more or less been done prior to George Osborne’s latest performance at the despatch boxes.

The tenure’s battered body – if not yet a corpse – lies bleeding somewhere in the shaded alleys of the corridors of power. But whether his efforts to save the aspiration of home ownership from dying its own drawn-out death are as yet open to question.

The Chancellor promised to double the housing budget to over £2bn and to deliver 400,000 new homes by the end of the decade. He called them affordable, although – as many people have come to realise – the word means little these days. And in what might be interpreted as a jibe to proponents of social housing he said: “affordable means not just affordable to rent, but affordable to buy”.

Osborne acknowledged a historic failure to build enough homes, calling it one of the “great social failures of our age”, but he also made it pretty clear that the decline in home ownership is the only crisis the Government was interested in resolving.

“In the end Spending Reviews like this come down to choices about what your priorities are, and I am clear: in this Spending Review, we choose to build,” he said. Above all, we choose to build the homes that people can buy.”

One can only presume, then, if you need to rent – don’t call the Chancellor and he won’t be calling you. Many will no doubt lament and decry the Chancellor’s cold shoulder for those unable to afford to buy a home, no matter how much state interventionist largesse the Government throws at home ownership.

“[T]here is a growing crisis of home ownership in our country,” Osborne added. “Fifteen years ago, around 60% of people under 35 owned their own home, next year it’s set to be just half of that. We made a start on tackling this in the last Parliament, and with schemes like our Help to Buy the number of first time buyers rose by nearly 60%. But we haven’t done nearly enough yet. So it’s time to do much more. Today, we set out our bold plan to back families who aspire to buy their own home.”

And so he did, promising the “biggest house building programme by any government since the 1970s”.

Almost half of those 400,000 new homes will be so-called Starter Homes, sold at a 20% discount off their full market price to “young first-time buyers”. And the tally also includes 135,000 the new Help-to-Buy shared ownership scheme announced today.

“We’ll remove many of the restrictions on shared ownership – who can buy them, who can build them and who they can be sold on to,” he said.

The scheme will lift the limits so that anyone who has a household income of less than £80,000 outside London, and £90,000 inside London, can buy a home through shared ownership. Only military personnel will be given be priority over other groups, the Treasury said. People can buy a share between 25% and 75% of a home. The rent on the rest of the property won’t be more than 3% of the amount left.

In a way, for all that social housing failed to get a mention in its own eulogy; the Chancellor didn’t entirely forget the providers. There’s that little matter of extending Right-to-Buy to housing association tenants. On that score, Osborne announced that a pilot of the policy is to start from midnight tonight – with eligible tenants of five housing associations able to start the process of buying their home.

The Chancellor also announced measures to accelerate housing supply: “We are announcing further reforms to our planning system so it delivers more homes more quickly. We’re releasing public land suitable for 160,000 homes and re-designating unused commercial land for Starter Homes. We’ll extend loans for small builders, regenerate more run-down estates and invest over £300 million in delivering at Ebbsfleet the first garden city in nearly a century,” he said.

Government is also set to introduce a scheme to help people buy a home in the capital, named – appropriately enough – London Help to Buy. Under the provisions of this scheme Londoners with a 5% deposit will be able to get an interest-free loan worth up to 40% of the value of a newly-built home, leaving them to cover the remaining 55% of the cost by other means. No doubt those of a sceptical turn of mind might think of the scheme as a ‘two-mortgage for one home deal’.

Meanwhile, for buy-to-let lenders and those otherwise seeking to purchase a second home, Osborne has doubtless set teeth gnashing with an unabashed populist measure – raising stamp duty by 3% on the purchase of additional homes.

“[M]ore and more homes are being bought as buy-to-lets or second homes. Many of them are cash purchases that aren’t affected by the restrictions I introduced in the Budget on mortgage interest relief; and many of them are bought by those who aren’t resident in this country. Frankly, people buying a home to let should not be squeezing out families who can’t afford a home to buy,” Osborne said.

The measure will be introduced from April next year, following a consultation on the details so that corporate property development remains unaffected.

“This extra stamp duty raises almost a billion pounds by 2021 – and we’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership. The funds we raise will help building the new homes,” he added.

All told, the Chancellor was on form during today’s speech. There were a number of populist measures, some seemingly worthy announcements of substance such as on health and social care – a fine tooth comb of the devilish details will offer the final verdict on this and other matters – and he had a fair few jibes up his sleeves too.

There was also a rather self-indulgent flavour to Osborne’s performance, as he rolled out his now-familiar signature clichés. Yes, he’s still fixing the roof. The sun is still shining. And we’re still all in it together. But you have to wonder whether, just once, he might like the chance to strut his stuff while singing in the rain.

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