With over £44 billion of investment pledged to support the housing industry, Philip Hammond’s Autumn Budget has been hailed a budget for builders.
He’s promised consultation after consultation, looked at planning reform and allocated a healthy pot for investment. But where are the growth areas for custom build?
Well, disappointingly, neither the Right To Build nor the custom and self-build (CSB) sector got a mention, which is something of a missed opportunity. It would have been a chance opportunity to ensure the Right To Build stayed in the media’s consciousness.
But overall, although the figures are fairly hefty and the measures pretty expansive, the budget was somewhat under-whelming, although a long way from the Eeyore predictions of some.
In particular, when you examine some of the funding commitments and split them out over the time frame indicated, the figures don’t seem quite so impressive.
All bets were on some form of Stamp Duty Land Tax (SDLT) relief as a way of appealing to generation rent, if not the whole country as it’s a reviled tax.
The reality though is relief only for First Time Buyers (on homes below £500,000), which, in the grand scheme of things, doesn’t go far enough to transform the market.
On a reasonably priced house in many parts of the country the savings will be enough to buy you a sofa – hardly a deal breaker for those desperate to get their own home.
Simply put, the SDLT relief is a way of helping the younger end of the market on to the housing ladder, and hopefully voting Conservative, as it has long deemed itself the party that prioritises home ownership.
But like Help to Buy, the response to the relief has been criticised for damaging the market, with talk of it bolstering prices, or even increasing them, as it doesn’t increase supply, which is a major part of the problem.
Where this is a missed opportunity, particularly for the CSB sector, is that a stamp duty holiday would have invigorated the entire stagnant second homes market, and especially the downsizing end of it.
However, there are some areas announced that canny custom build enablers and developers should look to exploit.
On a basic level, the commitment to bring on 300,000 homes a year means that the odds are stacked in favour of development, and custom build certainly counts as that.
Key here for custom and self-build is the budget announcement that councils will be expected to bring forward 20% of their housing supply for small sites. This could be a huge driver for custom build, as so many of the developers and enablers are SME businesses.
Smaller sites are less attractive to the volume house builders, and combined with Government advocacy of SMEs and the Right To Build, this could actually see the pace of custom build sites increase, countering one of the traditional barriers to custom build growth.
While not really expanded upon, the announcement of five new Garden Towns is fertile ground for custom build. By their very nature the organisations working to bring on these towns look at ways of innovating and placemaking as a way of embedding these new towns into their locale.
Custom build and community-led housing really contribute to the diversity on these Garden Towns, and their long-term outlook means they can be factored in from the start.
If you’re operating in the CSB arena, make sure you’re in contact with the local authorities and bodies responsible for these towns, and you may well reap the dividends down the line.
The £1.5 billion increase to the Home Building Fund could make all the difference to a custom build development, especially if it’s struggling to get early finance.
The HBF has become the go-to fund for custom build, and even cohousing, and shouldn’t be overlooked by landowners and enablers wanting to bring on a site.
Changes in Housing Revenue Account will allow councils in some areas to borrow to build social housing, while the meagre estate regeneration boost will also contribute to transforming places.
Custom build is wrestling with the route to scale and affordability, but as part of innovation, social rent and estate regeneration should also have the same right to diversity and choice in housing that custom homes can deliver.
We know there’s not an easy route to the affordable conundrum for custom build right now, but that doesn’t mean it should be discounted.
Swan Housing is already doing it at its Beechwood West site, part of the estate regeneration of the Crayland’s estate in Basildon.
This is really exciting innovation in action, and may establish a blueprint for future development. It could offer a far wider group of people real choice in their homes that reflects their needs and desires, whether that be multi-generational living or working from home.
Now that would be a vote winner!