The chancellor noted that the Review’s first priority was getting the country through coronavirus, its second was stronger public services, with its final priority to deliver “record investment plans in infrastructure”.
Looking at how this will impact the property market, Sunak announced that, to build housing, the government was introducing a £7.1bn National Home Building Fund, on top of its £12.2bn Affordable Homes Programme.
He also revealed a Levelling up Fund totalling £4bn, so that local areas can bid directly to fund local projects.
The fund will be managed jointly between the treasury and the department for transport and the ministry of housing, communities and local government.
“Projects must have real impact,” Sunak said.
“They must be delivered within this parliament, and they must command local support, including from their member of parliament."
This includes “infrastructure of everyday life”, such as railway stations, libraries, museums, and better high streets and town centres.
“This government is funding the things people want and places need.”
The government also published a new National Infrastructure Strategy, with plans to establish a new UK infrastructure bank headquartered in the North of England.
The bank will work with the private sector to finance major new investment projects across the UK, starting this spring.
Property industry reacts
Andrew Shepherd, managing director at TopHat, welcomed the new £7.1bn National Home Building Fund, but urged ministers to continue to encourage the uptake of modern methods of construction to truly realise the benefits of this investment.
“…At the moment, traditional housebuilders do not have the capacity to deliver on the 300,000 new homes a year target,” he said.
“By encouraging more investors, developers, councils, and housing associations to deliver more homes using innovative, technology-led methods, the government can begin addressing the historic supply and demand imbalances in UK housebuilding.
“In addition, such a policy would allow the government to build back greener by putting sustainability at the heart of development,” he explained, highlighting the energy-efficiency benefits of homes manufactured along production lines.
Jonathan Rubins, director at Alternative Bridging Corporation, also welcomed the Home Building Fund and the Affordable Homes Programme, as they show the ongoing need for the development of new homes in the UK.
“[However], the reality is that they are unlikely to offer any real benefit to small- and medium-sized developers, and the onus remains on working with experienced specialist lenders that understand this sector and can work alongside developers to make their schemes a reality."
Brian Berry, chief executive at the FMB, said that the announcement from the government must be “bolder” if we are to ‘build, build, build’ our way to recovery.
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“Local builders stand ready to support a strong and green economic recovery, but the statement from the chancellor fell far short.”
However, he embraced the confirmation of investment in further education and skills.
“SMEs train 71% of apprentices in construction and are ready to help support new jobs in the sector.
“While the confirmation of funding for further education, £375m through the life time skills guarantee, and a particular reference to apprenticeship changes to help SMEs are all steps in the right direction, colleges will need more support if we are to cover the existing gaps in traditional construction skills like bricklaying, let alone train people in much needed green construction techniques.”
Brian added that, this year more than ever, we have all appreciated how important it is to have a decent place to live.
“SME housebuilders stand ready to deliver more sustainable and beautiful homes in each community and on small brownfield sites.
“Extra funding is welcome, but without urgent investment in our local authority planning departments to speed up decisions, projects are struggling to get off the ground."
Yann Murciano, CEO at Blend Network, added: “The bottom line in chancellor Rishi Sunak’s Spending Review was that there’s less cash in the pot, and that following the spending spree of the past few months, it is time for everyone to tighten their belt.
“From the point of view of specialist lenders and development finance providers like us at Blend Network, this means growing lending opportunities, because if lack of funding was already a high-profile problem in the UK’s housing market, this lack of funding is likely to become an even bigger issue going forward.
“…Those SME property developers and small experienced construction companies will find themselves in increasing need for finance from other sources, and the alternative lending industry stands strong and ready to face the growing demand.”
Dean Clifford, co-founder of Great Marlborough Estates, commented: “The extra funding support [for] housing delivery announced yesterday is welcomed as there is still a national housing shortage amplified across all generations of stock, whether it’s homes for first-time buyers, families [or] downsizers.
“However, the devil is in the detail, and it is equally important that the government doesn’t water down planning reforms or compromise on design standards that would reduce the quality of new homes built.”
O’Neill Patient CEO, Andy Scaife, said that the biggest impact on the market is going to come from the end of the SDLT holiday in March.
“The chancellor needs to address this as a matter of urgency and we renew the call for reviewing the deadline if, as he said, he wants to help people to thrive in their communities and to live in the homes they want.”
"Coronavirus rightly took up the majority of the chancellor's spending commitments, but there was precious little offered to the thousands of households trapped in potentially unsafe or worthless homes thanks to the government's bungled response to building safety issues in the wake of the Grenfell tragedy,” claimed Mary-Anne Bowring, group managing director at Ringley.
“Having committed billions to protect us from the fallout of Covid-19, the chancellor should also commit to spending whatever necessary to ensure that flat owners aren't left to foot the bill for any cladding work needed on their building."