Hammond vows to boost UK homebuilding

The govt hopes to see 300,000 new homes a year, an increase from the 217,000 built in the past fiscal year

By BLOOMBERG

LONDON • UK Chancellor of the Exchequer Philip Hammond will announce a plan to increase house building by almost 40% as his Conservative Party seeks to woo younger voters with promises to give them the same home-ownership opportunities as their parents.

The government hopes to see 300,000 new homes a year — an increase from the 217,000 built in the past fiscal year — with new investment and rules that would make it easier for construction companies to build on sites that already have planning approval, Hammond said.

The government must “make good on our pledge this generation should have the same opportunities as their parents’ generation,” he said on the BBC’s “Andrew Marr Show” yesterday. “To start to make inroads we’ve got to be sustainably delivering 300,000 homes a year.”

In a preview of last Wednesday’s budget in the Sunday Times, Hammond also said he will start an investigation into builders who hoard land, local authorities that block developments and ensure homebuilders have access to the finance they need. Still, he ruled out changing regulation to allow construction on so-called green belt land when questioned on the BBC about plans to loosen planning rules.

Housing is one of the hottest political issues in the UK, with the Tories and Labour offering rival visions of how to make homes more affordable after years of rocketing prices. Prime Minister Theresa May in October pledged £2 billion (RM11 billion) to build an extra 25,000 homes for low-income residents; critics dismissed the initiative as “chicken feed”.

The Chancellor is under pressure to use the Budget to help revive the fortunes of a Tory party beset by infighting, divided over Brexit, and still smarting from a disastrous June election in which May lost her parliamentary majority.

Trouble is, Hammond has limited room to loosen the purse strings, and almost certainly much less than he’d thought.

Since the Spring Budget, the UK’s growth outlook hasn’t improved and interest rates rose for the first time in a decade — bad news for mortgage holders. The potential shocks caused by Brexit and a reassessment of productivity data are constraining Hammond’s room for giveaways.

The new measures are part of a push by government to fix a housing market whose surge in recent years has left most younger Britons unable to get onto the property-owning ladder. Labour’s proposal is to build at least 100,000 affordable homes a year and to cap rent increases to the rate of inflation.