Spending Review 2021: Confirmation Bias
Spending Review 2021 a chance to level up
Following the name change of the Ministry of Housing, Communities & Local Government to the Department for Levelling Up, Housing and Communities, we had hoped that today’s Spending Review would have included new initiatives to level up the access to housing.
We had hoped that Generation Rent and those without access to the Bank of Mum and Dad (one of the UK’s biggest ‘lenders’) would have been helped onto the housing ladder as part of a levelling up of our economy as we move towards higher wages and higher skills.
However, we were disappointed. Rather than new levelling up policies, the majority of the major housing-related announcements were ‘confirmations’ of previously announced policies. Today's Spending Review was more of a confirmation bias rather than a bold start for the Department of Levelling Up. A missed opportunity to fix a broken market and perhaps a confirmation that rising house prices are more important than levelling up the housing market in some of the corridors of power.
Mr Sunak told us that:
Employment is up.
Investment is growing.
Public services are improving.
The public finances are stabilising
He went on to say that:
Let there be no doubt – our plan is working.
The only up is house prices, the housing market remains unlevel
But the review had nothing really new to say about the housing market and the current plans do not appear to be fixing the broken housing market. Mr Sunak may believe that his plan is working, but the housing market remains broken and there are no new plans to sure it up or level it up.
The major 'confirmations'
We highlight below the major housing related comments from the actual Spending Review
To turn Generation Rent into Generation Buy, the government is building on existing
commitments by confirming a nearly £24 billion multi-year settlement for housing. This includes
up to 180,000 affordable homes through investment of £11.5 billion in the Affordable Homes
Programme – the largest cash investment in a decade, with 65% of funding for delivery outside
London. The government is also helping people to feel safe in their homes by confirming the
commitment to unprecedented grant funding of over £5 billion to remove unsafe cladding
from the highest-risk buildings, supported by revenues raised from the new Residential Property
SR21 invests a further £1.8 billion to meet the government’s commitment to £10 billion investment in housing supply and unlock over 1 million new homes. SR21 also reconfirms £11.5 billion investment through the Affordable Homes Programme (2021-26), of which £7.5 billion is over the SR period - the largest cash investment in a decade, delivering up to 180,000 affordable homes. Around two thirds of the Affordable Homes Programme funding will be for homes outside London.
SR21 confirms £5 billion funding (£3 billion of which is over the SR period) for remediation of the highest risk buildings with unsafe cladding to ensure everyone can feel safe and secure in their home.