Chartered Institute of Housing responds to Osborne's Budget

Published by Max Salsbury for 24dash.com in Housing and also in Central Government

George Osborne’s moves to boost home ownership in yesterday’s Budget have been welcomed by the Chartered Institute of Housing (CIH).

However, it has warned that the government's measures could push up house prices if they fail to stimulate housebuilding on a big enough scale.

CIH chief executive Grainia Long said: “The significant support for home ownership and construction through Help to Buy and the mortgage guarantee scheme is welcome recognition of the central role housing can play in powering our economic recovery.

"Thousands of people have been locked out of home ownership by spiralling prices and these schemes will help to address that.

“However, government will need to monitor the impact of these policies carefully to ensure that they are increasing new house building rather than simply stoking up house prices.

“We are disappointed that the Chancellor has missed the opportunity to lift local authority borrowing caps so they can invest more in developing new homes.

"This move would release nearly £10 billion of investment over five years, to build 15,000 homes a year, supporting 23,500 jobs a year and adding £5.6 billion to our economy per year.

"CIH will continue to press for borrowing caps to be lifted. We believe that with house building at its lowest level since the Second World War the government needs to invest directly in new homes on a bigger scale.”

On the future for social rents announcement: “We are pleased that the government has listened to CIH’s call to provide certainty for social rents beyond 2015. This will give landlords the confidence to invest for the future by enabling them to secure around £3 billion a year of new private finance to invest in the continued supply of new homes.”

On additional support for new affordable homes: “The announcement of an extra £225m to support up to 15,000 new affordable homes through the guarantee scheme is a welcome contribution to provide much-needed new homes for people on lower incomes.”

On build for rent: “This scheme has been massively oversubscribed so we are pleased that more money is being invested. Market renting is the fastest growing sector of the housing market, but demand is still outstripping supply in many areas leading to rising rents and worsening affordability. This scheme can play a key role in bringing institutional investment into the market rented sector and will help to increase the supply of new homes for rent.”

On Right to Buy: “Increasing access to Right to Buy is good news for the people who will benefit and local authorities may receive more money to invest in new homes. But it’s still not clear whether the homes that are being bought under this scheme will be replaced on a one for one basis, as the government promised they would be. If they are not then the number of affordable homes available for social rent will be reduced, and that’s not good news for anyone.”