There is no silver bullet to solve Britain’s housing crisis but the Budget will contain a range of proposals to help get 300,000 homes built a year, Chancellor Philip Hammond has said.
He has stressed fixing the housing market is a “crucial part” of ensuring Millennials are not the first generation since the Black Death to be less prosperous than their parents.
But he rejected suggestions from Communities Secretary Sajid Javid, who is responsible for housing, to borrow tens of billions of pounds to fund a massive home building programme, warning that only pouring money into the market would “make the problem worse” by pushing up prices.
Mr Hammond told BBC One’s The Andrew Marr Show: “The challenge here is affordability and I think experts generally agree that to start to make inroads on the affordability problem, we have got to be sustainably delivering around 300,000 homes a year on average across the housing cycle.
“That’s a big step up from where we are now.
(Victoria Jones/PA)
“There is no single magic bullet and it’s certainly not just about pouring money in, because if you pour money in without fixing the other elements of supply, you will simply create more house price inflation, that makes the problem worse, not better.”
Mr Hammond signalled the Budget would contain fresh plans to help first-time buyers struggling with high prices but would not be drawn on questions on whether he would cut stamp duty.
“Obviously I’m not going to announce tax measures ahead of the Budget but we recognise the challenge for young first-time buyers, that in many parts of the country deposits are now very large,” he told Marr.
“We’ve already put in place schemes like the Help to Buy equity loan which have given 400,000-odd first-time buyers an opportunity to get on to the property ladder.
“But again, nobody is saying we have done enough, we must do more, we recognise there’s a challenge there and on Wednesday I shall set out how we intend to address it.”
Official figures this week showed more than 217,000 homes were built last year.
But to get up to the target of 300,000, Mr Hammond has promised to do “whatever it takes” to get homes built including underwriting loans to small house-builders if necessary.
According to the Sunday Times, he will also find around £5 billion for housing schemes.
He has also indicated 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.
And there will be moves to decontaminate potential sites for housing and build roads to open up new land for building.
Mr Hammond said he expected Britain’s national debt to start falling thanks to the Government’s deficit reduction plan.
“We are now at the point, or almost at the point, where that debt stops growing and starts to slowly decline,” he told Marr.