Inside Housing – Home – A pointless cut in stamp duty could end up being paid for by fewer new affordable homes

Housing secretary Simon Clarke repeated the prime minister’s assurances that the government is still committed to the manifesto pledge to abolish Section 21 no-fault evictions, despite intense speculation that it might be ditched as over-regulation.
However, asked by Labour’s Matthew Pennycook to commit to introducing a renter reform bill in “the next parliamentary session”, he merely promised that it would be “in the course of this parliament”, so it does not look like a priority.
There was, perhaps, better news on another deregulatory measure that is rumoured to be on the new government’s agenda: increasing the threshold for exempting developments from contributing to affordable homes to sites of up to 50 homes.
This was proposed and rejected under the Boris Johnson government because of the impact on affordable housing but looked ripe for revival under the new one’s economic liberal ideology.
Asked about it by Labour’s Ben Bradshaw, Mr Clarke said that “We are looking at all the options that are open to us to try to accelerate house building across the country. We want to make sure that the right incentives are in place for developers to build.”
Which sounds like bad news, but he added that: “We have consulted on that particular option before, and we have decided not to do it. It is an issue that we keep under review, but the reasons that applied in our decision not to proceed then are very powerful.”
Significantly, he was also pressed on the issue by Tory backbencher Selaine Saxby, who asked him directly how he would “ensure that affordable houses are built in rural Britain if the development size limit moves from nine to over 40?” Mr Clarke told her: “We are looking at all the measures that can be used to drive forward and accelerate housing growth, but as I said in response to (Mr Bradshaw), there are compelling reasons why this option has not been pursued before, and I hope that will give some comfort to my hon. Friend today.”
He was also asked for more details on the proposed investment zones by MPs worried about the implications for departmental budgets and for environmental protection.
Pressed by Labour’s Clive Betts he said that funding for them would be “new money – it is coming from the Treasury as part of the settlement” but that did not really allay fears about other DLUHC budgets.
And the housing secretary said that “investment zones are not in any way about cutting away environmental protection. They are about streamlining planning and making sure that lower taxes are on offer in targeted sites. Overwhelmingly, they will benefit brownfield regeneration projects, which would otherwise take years to unlock.”
The session also made clear that the government will face opposition from Conservative backbenchers if it relaxes protections from development for the environment and wildlife. Housing minister Lee Rowley assured them that “we are committed to strong environmental outcomes in those areas and across the planning system”.
The exchanges are a reminder that, after ditching tax cuts as a route to growth, the government may also find trouble ahead with its supply side reforms.
And, even as it gears up for them, the signals are already flashing red for the housing market and the economic activity it generates.
Despite that stamp duty cut, mortgage costs are up, analysts are predicting falling housing completions and leading housebuilders are reporting a slump in reservations of new homes.
Little wonder that the government has moved to sideline its manifesto target of 300,000 new homes a year. Growth, growth, growth already looks more like decline, decline, decline.
Jules Birch, columnist, Inside Housing



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