The chancellor has cooled expectations his Budget will see him pump billions of pounds into boosting housebuilding.
While Philip Hammond wants to make sure small and medium-sized builders “can access the finance they need” in order to help the country build about 300,000 homes a year, he did not commit to backing the reported £50bn communities secretary Sajid Javid wanted to meet that target.
The Sunday Times reported this weekend that Mr Hammond “will find about £5bn for housing schemes and underwrite loans worth tens of billions more”, according to senior government sources.
On the Andrew Marr Show yesterday Mr Hammond said: “If you pour money in without fixing the other elements of supply you will simply create more house price inflation.”
Mr Hammond said he had been “working very closely together” with Mr Javid on tackling prime minister Theresa May’s top priority: the housing crisis.
While the number of planning permissions being granted is at “record levels”, Mr Hammond acknowledged there is a problem with getting sites built out.
He said there are 270,000 approved planning applications in London alone which have not yet been built and added that number is only likely to get bigger.
“We will intervene,” said Mr Hammond. “We will use money, we will use the powers of the state, and we will use the planning system. We are determined to get those missing homes built.”
In an interview with The Sunday Times Mr Hammond said the government will launch and inquiry into “housebuilders land banking, speculators hoarding land and local authorities blocking development” to report next spring.
He said: “We will not be afraid to intervene to do whatever it takes to close the gap. If it’s infrastructure that’s needed to unlock housing, we’ll build the infrastructure. If it’s financial viability that’s needed, we will intervene to remediate sites and make otherwise marginally non-viable sites viable.”
In that piece he also revealed he will announce funding to build new roads to unlock land for housing, pay to clean up polluted industrial sites so they can be developed, and make councils allocate small pockets of land for development by small builders.
Meanwhile, today the prime minister announced a £1.7bn ‘transforming cities fund’ which is aimed at improving transport links and promoting local growth within city regions. The West Midlands is set to receive £250m of the fund, which is being launched as part of the industrial strategy.