Osborne to fuel housing boom

British Chancellor George Osborne

Chancellor George Osborne will unveil his spending plans up to 2020 , which will include billions of pounds in cuts but also new money for housebuilding

British Chancellor George Osborne
British Chancellor George Osborne

The Spending Review is a five-year projection of government spending. In effect, it decides how £4 trillion of taxpayers’ money will be spent by setting caps on government departments. But the chancellor will pledge almost £7bn to make housebuilding a priority, with more than 400,000 “affordable homes” to be built in England, BBC reported.

Plans to mitigate the effect of tax credit cuts have also been promised. The combined Autumn Statement and Spending Review will set departmental spending limits for the next five years and give details of the government’s taxation and deficit reduction plans.

Ministers have pledged to cut annual welfare spending by £12bn, and government departments have been asked to find a total of £20bn in savings under plans to achieve a £10bn budget surplus by 2019-2020.

The chancellor also hopes to raise £5bn with a crackdown on tax avoidance.

Mr Osborne will promise to address a “crisis of home ownership in our country”, pledging a “bold plan to back families who aspire to buy their own home”.

The Treasury said the chancellor would unveil “the biggest affordable housebuilding programme since the 1970s”.

The proposals include £2.3bn paid directly to developers to build so-called “starter homes”, aimed at first-time buyers, who will get a 20% discount on prices up to £450,000 in London and £250,000 elsewhere.  £4 billion to help build 135,000 “Help to Buy: Shared Ownership” homes for households earning less than £80,000 (or £90,000 in London).

Another £200m for 10,000 new homes that tenants can live in for five years at reduced rents while they save for a deposit. They will then have “first right” to buy the home and £400m to help build 8,000 specialist homes for older people or those with disabilities.