Housing: Prices – Parliamentary Written Answer

 Baroness Ritchie of Downpatrick: To ask Her Majesty's Government what assessment they have made of the impact of changes in the level of house prices on the UK’s economic recovery.

Lord Agnew of Oulton: HM Treasury does not prepare formal forecasts for house prices or the outlook on the UK economy, which are the responsibility of the independent Office for Budget Responsibility (OBR). In its March forecast, the OBR expects that GDP will grow by 4% in 2021 and return to its pre-Covid peak in 2022. The OBR also forecasts annual house price growth of 5% in 2021. The latest available data shows that UK average house prices reached £266,000 in June 2021.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2021-09-06/HL2449

Government Fail To Meet 300,000 New Home Pledge

Despite insisting in the 2017 budget that the government intended to build 300,000 new homes a year to help ease the housing crisis in England, latest figures by the Office for Budget Responsibility have found that hosing stock in England is falling short of the 300,000 pledge by over 20%. At current levels, the OBR claims that 233,430 new residential properties will be built in 2018, 66,570 dwellings short of the required amount. Further predictions have indicated that within the next five years this figure would rise to around 250,000 new homes per year. Read more on Today’s Conveyancer website.

https://www.todaysconveyancer.co.uk/main-news/government-fail-to-meet-300000-new-home-pledge/

Government's New Council House Building Drive Will Come At Expense Of Housing Associations

The government’s council house building drive will come at the expense of fewer new units constructed by housing associations. The independent Office for Budget Responsibility said it expected new council house construction of 20,000 units over the period as a result of the lifting of the HRA cap. However, the OBR, also added that it expected this to crowd out private house building, with every two new council houses resulting in roughly one less new private house, meaning the net impact on new housing supply from lifting the cap would be only 9,000. Read more on the Independent website.

https://www.independent.co.uk/news/business/news/council-house-building-social-housing-associations-theresa-may-a8614281.html

Social Rented Housing – Parliamentary Written Answer

Lord Beecham: To ask Her Majesty’s Government what assessment they have made of the impact of the reduction in social housing rents on the maintenance and improvement of the existing housing stock, and on the building of new houses between now and 2022.

Lord Bourne of Aberystwyth: The fiscal impact of the social rent reduction policy on public finances was included as part of the Office for Budget Responsibility’s policy costings for Budget 2015 which can be (attached) found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443195/Policy_costings_summer_budget_2015.pdf . In September 2015 the CLGcarried out an impact assessment of the effect of the social rent reduction policy on housing associations which can be (attached) found at http://www.parliament.uk/documents/impactassessments/IA15-006F.pdf .  Social housing providers are well placed to manage these reductions and have proved themselves to be more than capable of adapting and responding to change. The Government is investing £7.1 billion in the expanded Affordable Homes Programme from 2016-21, which will support housing associations and local authorities to build another 225,000 affordable homes by March 2021.

Housing: Prices – Parliamentary Written Answer

Grant Shapps: To ask the Secretary of State for Communities and Local Government, if he will make an assessment of recent trends in buy-to-let cost rises; and what steps his Department is taking to mitigate against any adverse effect from significant changes in property prices.

Gavin Barwell: HMRC’s analysis shows that only 1 in 5 landlords will be affected by the tax changes on property finance costs (such as mortgage interest or interest on loans to buy furnishings). The Government does not expect this to have a large impact on house prices or rent levels due to the small overall proportion of the housing market affected. The Office of Budget Responsibility also expects any impact to be small.

OBR Says Autumn Statement Will Reduce HA Building By 13,000

Despite all of the welcomes from the housing association sector, the Office for Budget Responsibility (OBR) has delivered a big blow. They say: “The Autumn Statement includes a number of policies that are likely to affect housebuilding and residential investment. Dropping the requirement for housing associations to move to a shared-ownership model and abandoning plans to force higher rents on some tenants will both reduce the cash inflows available for housebuilding. Partly offsetting that, additional grant funding and other smaller measures will increase cash inflows and boost housebuilding. The net effect is to reduce cumulative housebuilding by housing associations by around 13,000 over the forecast period, with a boost next year becoming a drag by 2019-20.” Read more on 24housing.

Housing Stock – Parliamentary Written Answer

Philip Davies: To ask Mr Chancellor of the Exchequer, what estimate he has made of the effect of changes to (a) tax relief to landlords and (b) regulations on buy to let mortgages on the number of homes (i) built and (ii) available to rent in the next five years.

Mr David Gauke: The Government expects the restriction to tax relief for finance costs for individual residential landlords to have a minimal impact on house building in the UK. Overall, the OBR believes the impact on the housing market will be small and, taking account of the other measures in the Summer Budget, have not adjusted their forecast for house prices. The Productivity Plan published alongside the Summer Budget includes a number of measures to make the planning system quicker, cheaper and more responsive to local housing needs.

HM Treasury expects a minimal impact on the supply of property in the private rented sector in the UK. The measure is expected to impact fewer than 1 in 5 landlords and will be introduced gradually from April 2017 over 4 years to give landlords time to adjust. The Budget also announced increased Rent a Room relief, which can help to increase levels of private rented accommodation. The Government is taking significant steps to support housing supply with housing starts now at a 7 year high.

Consumer buy-to-let mortgages will become regulated in March 2016 as part of the implementation of the EU Mortgage Credit Directive. However, independently verified government analysis suggests that approximately 86% of the market will remain unregulated, and that the costs imposed by this change are not of a sufficient scale to affect the supply of rental properties in the UK.

Rent Reduction 'Will Lead to 14,000 Fewer Homes Built'

The government’s policy of reducing social rents by 1% annually over the next four years will lead to 14,000 fewer homes being built. That is the forecast from independent fiscal watchdog Office for Budget Responsibility following the Budget. George Osborne announced that social rents will reduce by 1% annually over four years. The OBR said the measure, which comes into effect next April, will ‘directly reduce social landlords’ rental income, and therefore their financing for, and returns to, investing in new housebuilding’. Because of this, the OBR has reduced its forecast for residential investment by 0.7%. It says housebuilding by housing associations will drop by around 4,000 homes in 2019/20 and 14,000 over five years. Download the latest economic and fiscal outlook from the OBR website.

IDS: Bedroom Tax Has Saved Taxpayer £830m

Iain Duncan Smith has claimed the government has saved £830m as a result of the bedroom tax, and is on track to save £1bn over two years.  He said in the House of Commons the figures had been ‘ratified by the Office for Budget Responsibility’.  ‘To date, the policy has saved about £830m from the housing benefit bill, and the estimated savings remain the same: approximately £500m a year in 2013-14 and 2014-15.’ But Mr Duncan Smith did not give any figure when asked how much the benefit bill had risen as a result of tenants being forced into the private rented sector as a result of the changes. Read more on Inside Housing.

Taxpayers to Fork Out Extra £1BILLION In Housing Benefit - Despite Bedroom Tax Misery

Taxpayers are to fork out £1BILLION more in housing benefit despite the misery caused by the Bedroom Tax, reveals the Sunday People. Iain Duncan Smith launched the hated tax a year ago to save £490million from the ­annual £24billion housing benefit bill. But figures from the Government’s own Office of Budget Responsibility forecast it will rise by £100million in the next financial year, £300million in 2015-16, £300million in £2016-17, £200million in 2017-18 and £100million in 2018-19. Labour leader Ed Miliband said: “The housing benefit bill is going up not down. Those forced out of their homes have to get more help to pay rent to private landlords instead of councils or housing associations.” Read more on the Sunday People website.

Government Hides Risks Of Controversial Help to Buy Scheme

Ministers are refusing to publish the Government’s own risk assessment into its flagship housing policy, triggering suspicions that they are trying to cover up official warnings that the scheme will endanger the British economy.  A string of independent housing experts have publicly warned that Help to Buy will overheat the housing market and “detonate a bomb” under the British economy. Ministers have refused for months to say if any official risk assessment has taken place, insisting only that the independent Office for Budget Responsibility (OBR) was responsible for housing forecasts. Yet in a Freedom of Information (FOI) response to the Shadow Local Government Secretary, Hilary Benn, officials have revealed that the Government does indeed hold details of a risk assessment into Help to Buy, but that publication has been blocked by ministerial veto. The risk assessment was carried out before the policy was announced in March, meaning that the Chancellor ignored any warnings in it.  Read more on the Independent website.

Time to Take the Politics Out Of Housing

The systematic failure to deliver housing brings the planning system into disrepute. Housing is not a gamble on future prosperity like High Speed 2. It is the fundamental building block of social welfare. Decent homes underpin our wellbeing and reduce other social costs. The problem we face with housing is that there is huge mismatch between the expectations of communities and the demands of developers. It’s a problem that will never be resolved until we take the politics out of housing numbers. That’s why I think it is time to establish an Office of Housing Responsibility (OHR). Modelled on the Office for Budget Responsibility, the OHR will lift the assessment of housing need above the squabbles of local and national politics.  Read more on the LibDem Voice website.

OBR Cool on Help to Buy Scheme

The Government’s Help to Buy scheme will not have a major impact on house building, the Office for Budget Responsibility has said. Appearing before the Treasury Select Committee, the OBR’s Steve Nickell instead warned the scheme, which sees the Government offering guarantee for parts of buyers’ mortgages, would drive up prices in the short term.”  Mr Nickell said the scheme might help the situation “a bit”, but would not significantly boost the market.

Universal Credit – Parliamentary Written Answer

Sarah Teather: To ask the Secretary of State for Work and Pensions with reference to paragraph 2.66 of the Autumn Statement 2012, what estimate he has made of the number of households that will be exempt from the household benefit cap as a result of the decision to disregard housing payments for those in supported exempt accommodation for the purpose of the benefit cap.

Mr Hoban: Figures approved by the Office for Budget Responsibility estimate that this change will reduce the total amount of households affected by the cap by around 2,000 to 54,000 and reduce the savings by around £10 million to £265 million. While disregarding housing costs for these households does not exempt them per se, there will be very few who remain affected by the cap.

Housing Benefit Bill to Soar Despite Cutbacks

Housing benefit bills are set to soar despite government attempts to cut payments, according to the Office for Budget Responsibility. The independent body, which monitors the UK’s finances, has radically altered its modelling for changes in housing benefit demands.  The change in estimates is due to revised predictions of demand for housing benefit, and comes despite an announcement from chancellor George Osborne that benefits will only rise by 1 per cent for the next three years.  Read more on Inside Housing.

IDS Urged To Come Clean On 'Secret Business Case' Behind Universal Credit

Work and pensions secretary Iain Duncan Smith says the Government has "absolutely nothing to hide" around the cost of implementing Universal Credit amid concern from Labour that it is concealing hidden costs. In a Commons exchange, Labour's Liam Byrne asked Mr Duncan Smith if there is something he's trying to hide after highlighting two estimates around the cost of implementing the reform.  Mr Byrne said: "When Universal Credit is fully rolled out in 2017, the Office for Budget Responsibility (OBR) says that the extra costs will be £3.1bn. The Treasury in its budget says that the price must be no more than £2.5bn. With whose estimate does the Secretary of State agree?"  He continued: "The secretary of state must accept, as I am sure many in the House do, that an extra £600m will have a huge impact on whether people will be better off in work or on benefits. The Treasury clearly believes there is a state of chaos around Universal Credit, as do the Cabinet Office and No. 10. Surely it is time he tells the House exactly what is going on, and sets before us the business case that he is trying to keep secret from us. Is there something he is trying to hide?"  Read more on 24dash.

Budget 2012 - Effects on the Housing Sector

This year's Budget concentrates on reforms to the tax system that aim to reward work and support growth.  In his speech, Chancellor George Osborne was keen to point out that his budget was 'fiscally neutral' - ie all spending would be paid for by cuts elsewhere.

Key announcements affecting social housing include:

    *a cap on the additional costs of Universal Credit of up to £2.5bn a year in the next spending review

    *a consultation on the use of social housing Real Estate Investment Trusts (in Finance Bill 2013)

   *a pledge to 'take action' if HRA reform increases public borrowing by current OBR estimates

Read more on the CoalitionWatch blog.

Concern over HRA U-Turn

CIH has raised concerns over reform of the Housing Revenue Account (HRA) detailed in the Budget. Grainia Long, chief executive of CIH, expressed worries over the government’s plans to re-examine the amount councils are allowed to borrow after April 1 because the impact on public sector debt might be greater than expected.  She said: “Ministers stated during the passage of the Localism Bill that once set these caps wouldn’t be changed. The statement made in the budget may mean this promise is set to be broken and if so will severely disrupt council plans.”  Reform of HRA would, according to the Office of Budget Responsibility, increase public borrowing more than originally estimated.  “These are just estimates but if they do not change then the government has said it will take action to address the increase in public debt. This is very concerning and is a departure from the original commitment.”  Read more on the CIH website.

Housing Benefit Bill Set to Swell As Unemployment Soars

Welfare benefits are set to cost about £1.4 billion more than previously expected over the next four years because of rising unemployment, according to the Government's independent financial watchdog. The unemployment benefit bill is to be £700 million higher than thought, while the cost of housing assistance will also grow by £700 million because of larger numbers of people claiming jobseeker's allowance or falling into lower wage brackets, the Office for Budget Responsibility found. Its analysis is based on the revised unemployment estimate after the June budget, when it changed its forecast from 6.3% to 6.5% for 2014. Since then the forecast has been revised upwards again, to 6.7%, but no costing has been carried out for that figure yet. Read more on 24dash.

Housing Benefit Cuts 'Will Save 160,000 Jobs'

Cuts in housing benefit have saved 160,000 public sector jobs, the chancellor has claimed. In his autumn statement to Parliament on the economy, George Osborne said the Office of Budget Responsibility had revised its forecast for the number of jobs that would be lost in the public sector because of ‘difficult choices’ on housing benefit. The OBR has lowered its estimate from 490,000 to 330,000. Mr Osborne said: ‘The bulk of this revision results from the action we have taken to cut welfare bills rather than cut public services. ‘Our difficult choices on housing benefit and other benefits mean that fewer posts will be lost across the public sector.’ Read more on Inside Housing.