The date has been set, and one presumes, the preparations about what it will contain are well underway. I’m talking of course about the Autumn Statement, the first to be delivered by the new Chancellor, Philip Hammond, on the 23rd November this year.
As a start, it’s an Autumn Statement which appears to be taking place rather closer to Autumn than the December ones we’ve had in recent years. However, this is a mere trifle when you consider its overall importance, and what it will mean for the UK and (dare I say it) global economy given the fallout from June’s referendum vote and the lead-up to our Government, at some point, invoking article 50 to leave the EU.
This is a biggie – probably the biggest announcement by a Chancellor in recent times and to say the entire financial services industry, let alone the rest of the country will be glued to what he has to say, would be something of an understatement. So what might it contain? That is the $64,000 (or should I say £64,000) question and no doubt the next two months or so will be filled with plenty of speculation and ‘leaks’ about its contents.
First up, let’s look at the big EU question. We’ve already been told that there will be no action during 2017, and the ball in said to be in the UK’s court, however by November might we have an idea of a timetable for leaving. It’s perhaps unlikely but if so (and even without a clear idea of when we might be leaving), then one would anticipate the Chancellor would want to play up the positive and deliver as much confidence and ‘good news’ to the UK as a whole about its future and that of the prospects for the economy specifically.
The Chancellor has already sought to make a clear break with the legacy of his predecessor, George Osborne, talking about a ‘reset’ of policy but one can’t help feeling that there will be some clear overlap in terms of commitments which have been key policies and priorities for the Coalition/Conservative Government of the last six and a half years.
In that sense, one can’t help believe that this new Chancellor will be as keen to promote the building of new homes as George Osborne was; indeed, if we are to follow the lead of Theresa May – when she stood outside Number 10 for the first time as Prime Minister – then the promotion of home building and home ownership, particularly getting first-time buyers onto the ladder, will remain a central thrust. Which perhaps makes the lack of a Cabinet Place for the Housing Minister even more bizarre, but that’s politics for you.
That said, one presumes this Autumn Statement will be based on ‘stimulus’ and will look to follow the lead of the Bank of England last month. Its own stimulus package and the cut to Bank Base Rate present strong foundations for the Chancellor to metaphorically ‘build’ upon. The specifics, however, especially when it comes to getting builders to build more homes remain somewhat up in the air; what else can the Government do in this area that hasn’t already been done before?
Freeing up more land for building upon, developing finance schemes to help buyers’ purchase and to ensure that the builders can sell; relaxing planning laws, the list goes on. All have been put in place and yet the number of new homes still remains well short of the 250,000 new units per year the UK supposedly needs. Perhaps, we will see more generous incentives? Perhaps first-timers will get more help? Perhaps more land will be made available? The big question however is whether this will really push the numbers up and of course whether these are affordable homes that can be purchased by those new to home ownership.
One suspects the gist of the Autumn Statement will all be about engendering confidence after a post-referendum summer blip. This will be absolutely crucial, especially if we have more meat on the Leaving EU bone – there are bound to be jitters along the way and the Chancellor will want to ensure that he presents a Government and Treasury that is 100% on top of the major economic challenges that will undoubtedly arise.
Housing supply is clearly one of those – and let’s face it – has been for some time. The big question for us is whether he can marry up supply with the finance required to buy new homes. We all know that Help to Buy 2 is due to end this year – will it receive a stay of execution? If not, can the Treasury provide detail on its plans for the post-HTB2 environment and the incentives (or otherwise) it can provide to lenders to make use of private mortgage insurance after taking part in the State’s guarantee scheme. Perhaps we will see further HTB-esque schemes announced given the success of the HTB brand?
From now until the 23rd November all eyes will be on the new Chancellor. This presents a significant balancing act to get right, particularly if this Government wants to meet its own house building targets. Get it right and the boost could be large; get it wrong and we’ll be left in a similar, if not worse, position for the foreseeable future.
Pad Bamford is business development director at AmTrust Mortgage Insurance