Chancellor Philip Hammond will use the Budget to announce plans to get 300,000 homes built a year.
Mr Hammond said fixing the housing market was a “crucial part” of ensuring Millennials are not the first generation since the Black Death to be less prosperous than their parents.
He promised the Government would do “whatever it takes” to get homes built, including underwriting loans to small house builders if necessary.
(Victoria Jones/PA)
According to the Sunday Times, he will also find around £5 billion for housing schemes.
But he will not take up a suggestion by Communities Secretary Sajid Javid, who is responsible for housing, to borrow £50 billion to fund a massive home-building scheme.
Official figures this week showed more than 217,000 homes were built last year but the Chancellor told the newspaper: “I’m clear that we need to get to 300,000 units a year if we are going to start to tackle the affordability problem with the additions coming in areas of high demand.”
He added: “We will not allow the current young generation to be the first since the Black Death not to be more prosperous than its parents’ generation. We won’t allow that to happen. Fixing the housing market is a crucial part of making sure that doesn’t happen.”
Mr Hammond said ministers would work to close the gap between planning permissions being granted and the actual number of homes being built, signalling a review into “land-banking” and councils blocking development.
“We are generating planning permissions at a record rate, much faster than we are generating homes,” he said.
“It’s house builders banking land, it’s speculators hoarding land, it’s local authorities blocking development. Let’s get to the bottom of it once and for all to report publicly on what is causing this gap.”
He indicated moves to decontaminate potential sites for housing and build roads to open up new land for building.
“We will not be afraid to intervene to do whatever it takes to close the gap,” he said. “If it’s infrastructure that’s needed to unlock housing, we’ll build the infrastructure.
“If it’s financial viability that’s needed, we will intervene to remediate sites and make otherwise marginally non-viable sites viable.
“We’ve got to make sure our banks are willing to lend to small house builders and if necessary we will stand behind that lending.”
Mr Hammond also signalled that he would find money to lift the public sector pay cap and find more cash for services like the NHS.
“We’ve got to recognise that people in our public services feel under pressure from a long period of pay restraint,” he said.
“The public services themselves have strained every muscle, every sinew to deliver within very tight resource envelopes. We’ve got to do what we can.”
He said he remains committed to getting the deficit down and would not brazenly loosen the purse strings, but stressed he has scope to spend.
“We are heavily constrained fiscally,” he said. “We don’t have huge amounts of room for manoeuvre. But we do have some room.”
The Chancellor also took on his critics ahead of what is seen by some as a Budget which could determine whether he keeps his job in the face of Brexiteers’ reported anger over his support for a “soft” withdrawal from the EU.
Addressing reports that Michael Gove had been using “economicky words” during Cabinet meetings to audition for his job, Mr Hammond said “it would be absurd to suggest that no-one but the Chancellor and the Chief Secretary was allowed to talk about the economy” and joked he does not “have a monopoly on long words”.