Philip Hammond will wipe more than £60billion of housing association debt from the Government’s balance sheet in a move that will boost housebuilding ahead of his Budget.
The Chancellor yesterday warned that there is “no silver bullet” to fixing the housing crisis as he appeared to strike a significantly more downbeat tone than Theresa May.
However ministers have announced that housing association debt, which was transferred onto the Treasury’s books in 2015, will now be reclassified and wiped from the national debt.
The debt will be transferred back to Housing Associations, giving them greater control over their own finances and enabling them to build more homes. It is also likely to give Mr Hammond more room for manouver in his Budget.
The announcement will be made by Sajid Javid, the Communities Secretary, during a visit to Bristol. The Government said that the move will “ensure housing associations have a stable investment environment to build more homes”.
Speaking in the Treasury yesterday, Mr Hammond said: “There is no silver bullet, there isn’t a single thing that solves the challenge of affordability in the housing market – we are a crowded island and this is a very complex challenge.
“But we have done a lot of work on this and next week we will start to set out our plan for addressing the housing challenges in this country, making sure that the next generation has the same opportunities as their parents did for home ownership and the accumulation of personal wealth through assets.”
By contrast Mrs May struck a far more upbeat tone ahead of a visit to a new housing development in Barnet, North London, as she vowed to take “personal charge” of the response to the housing crisis.
She said: “That is why I have made it my mission to build the homes the country needs and take personal charge of the Government’s response.
“Today I am seeing the work now underway to put this right and, in coming weeks and months, my Government will be going further to ensure that we build more homes, more quickly.
“This will be a long journey and it will take time for us to fix the broken housing market – but I am determined to build a Britain fit for the future.”
It comes amid suggestions that The Treasury has been pushing Downing Street to relax planning restrictions on Green Belt land. The Prime Minister yesterday made clear in the Commons that the protections will remain in place.
The Chancellor has also rejected calls by Sajid Javid, the Communities Secretary, for the Government to borrow billions of pounds to invest in new housing.
Mr Javid will say today: “The generation crying out for help with housing is not over-entitled. They don’t want the world handed to them on a plate. They want simple fairness, moral justice, the opportunity to play by the same rules enjoyed by those who came before them.
“Without affordable, secure, safe housing we risk creating a rootless generation, drifting from one short-term tenancy to the next, never staying long enough to play a role in their community.”
He added: “But there are many, many faults in our housing market, dating back many, many years. If you only fix one you’ll make some progress, but not enough. This is a big problem and we have to think big.”
Article Source : http://www.telegraph.co.uk/news/2017/11/15/philip-hammond-wipes-60bn-debt-government-books-bid-build-affordable/