In this section:

Autumn Statement 2023: Housing Implications 24/11/2023 Labelled as Finance

On 22 November Chancellor of the Exchequer Jeremy Hunt gave his second Autumn statement. Against the background of a more positive economic outlook than previously feared, the government can now, he said, "take the long-term policy decisions necessary to strengthen the economy and build a brighter future". These include some tax cuts, including a 2% cut in the basic rate of national insurance. Working age benefits, including UC, will increase by 6.7% from April 2024, in line with CPI to September 2023; state pensions will rise by 8.5%, in line with the increase in average earnings, in accordance with the "triple lock" policy. Other announcements on welfare spending include a commitment to raise the Local Housing Allowance rate from April 2024 to the 30th percentile of local market rents, making the average private renter receiving help with rent £800 better off next year. No mention was made of council or housing association rents, providing further confirmation that social landlords can expect to be free to increase rents by up to 7.7% from April 2024.


The main reasons for the government's more positive view of the economy are that the annual rate of inflation fell to 4.7% in October 2023 from a high of 11% in 2022, and that OBR has recently issued updated estimates of national output (GDP) showing that national output returned to its pre-pandemic level by the end of 2021 and continues to grow, albeit slowly. Previous figures forecast that the economy would not recover to its pre-pandemic level until 2025. However, the main reason for this improved output seems to be that net migration was also significantly higher than previously forecast, leading to more people in work than expected; GDP per head remains 0.6% below the pre-pandemic level.


The statement also includes a chapter on the steps the government is taken to improve productivity in both the public and private sectors, focussing in particular on advanced manufacturing, green industries, the police and NHS. However, there is no mention of the construction industry, despite substantial evidence that low productivity is a significant barrier to increasing housing output and reducing costs.


Some additional help is provided to support new housebuilding by local authorities and housing associations. The Affordable Homes Guarantee Scheme has been extended for a further year at a cost of £3 billion. The scheme, which was launched in November 2021, allows DLUHC to guarantee bonds issued to raise money to provide lower-cost loans to housing associations for up to 30 years to build affordable housing. The Public Works Loans Board "policy margin' which allows for lower-interest loans to local authorities to build or invest in housing has also been extended for a further year.


£32 million has been allocated for planning initiatives that, it is claimed, will enable the construction of more homes. Some of this will go to help clear backlogs in local planning departments, the rest to help support the development of various infrastructure initiatives, including establishment of a development corporation in Cambridge, a mass transit system in West Yorkshire and a rapid bus transit system for Thamesmead in South East London.


Funding has also been provided for homelessness prevention and housing for Ukrainian and Afghan refugees. The Local Authority Housing Fund has been allocated an additional £450 million to provide additional funding for new temporary accommodation as well as homes for Afghan refugees, bringing total funding provided to £1.2 billion. "Thank you payments" to households hosting Ukrainian refugees have been extended for a further year and £120 million allocated for homelessness prevention, including help for Ukrainian households becoming homeless.

Like emailLink
ARCH Member Comments 0 people like this