From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to for wider content and updates from UK Finance.

  1. Home
  2. News
  3. Week in Westminster
  4. Hammond's first, and last, Autumn Statement

Hammond's first, and last, Autumn Statement

Week in Westminster

Published: 25 November 2016 | Author: Michelle Vosper

The highlight of the week was the chancellor Philip Hammond’s first (and last) Autumn Statement – he announced that the Autumn Statement is to be scrapped and the Budget moved to the Autumn.

The government intends to publish a housing white paper shortly setting out a package of measures to increase housing supply and stop the decline in housing affordability. However, there were some Autumn Statement announcements which will be of interest:

  • The government will relax restrictions on grant funding to allow affordable housing providers to deliver a mix of homes for affordable rent and low cost ownership, introducing tenure flexibility across the Affordable Homes Programme.
  • The government confirmed the Greater London Authority’s affordable housing settlement of £3.15 billion for delivery of housing.
  • The government will fund for a “large-scale” regional pilot of the Right to Buy for housing association tenants.
  • The government will consult ahead of bringing forward legislation to ban letting agents’ fees to tenants.
  • The government confirmed that HM Land Registry will remain in the public sector.
  • The government will delay (by a year) the cap on Housing Benefit and Local Housing Allowance rates in the social rented sector until April 2019.
  • The government will scrap Pay to Stay for social housing tenants.

Renters' rights

LibDem Baroness Grender’s Renters’ Rights Bill has completed its Lords committee scrutiny and now awaits a date for its report stage. The Bill aims to make renting cheaper, safer and more secure for tenants, and includes provisions that would ban letting agents’ fees to tenants. During the Bill’s committee stage on 18 November DCLG minister Lord Bourne of Aberystwyth referred to comments made by the housing minister of the need to be mindful about the potential impact on rents from banning fees paid by tenants. As mentioned above, the chancellor has since announced in the Autumn Statement that the government will legislate to ban tenant’s fees after consultation. It is unclear whether the government will use Baroness Grender’s Bill to do this.

Mortgage affordability and existing mortgage holders

The impact of the FCA’s mortgage affordability assessments on existing mortgage holders was the subject of a group of written parliamentary questions from Belfast South MP Dr Alasdair McDonnell.

Self and custom build

The Communities and Local Government committee questioned small and medium-sized homebuilders, representatives from custom and self-builders, and companies using off-site construction methods as part of its inquiry on capacity in the homebuilding industry. Commenting on the supply of stage payment mortgages Chris Brown, founder of Igloo Regeneration, said: “from a custom-build perspective, the supply that is out there at the moment is nowhere near enough for us to ramp up and we are in this catch-22 situation at the moment: without the big mortgage providers being in the stage payment mortgage market, we cannot ramp up production.  They will not get into the market because it is very expensive for them to get the new systems, particularly the IT systems until there is big supply. We are kind of stuck at the moment and we have all got this sword of Damocles of the Prudential Regulation Authority hanging over us and the threat of increasing the capital weighting of stage payment mortgages, despite the very low default rates, to a much higher level, which penalises the banks and makes them more expensive.  We can probably survive where we are at the moment and keep doing what we are doing, but there are some barriers to scaling up.”

Staying on the subject of small developers, the Scottish government has published a report on a survey of small housing developers in Scotland, exploring their expectations for building in the future and barriers they face.

Capital requirements

The capital treatment of banks was raised by Conservative MP Peter Lilly during prime minister’s questions. Mr Lilley pointed out that given the problems associated with the UK’s shortage of housing, the European Banking Authority’s recommendation to increase the reserves banks must hold against house building is “profoundly unhelpful and perverse”.

This week the European Commission proposed amendments to the EU capital framework for banks. The amendments include measures aimed at strengthening the resilience of the banking sector by introducing more “risk-sensitive” capital requirements. At the same time, the new measures hope to make CRD/CRR rules more proportionate and less burdensome for smaller financial institutions and will improve banks' lending capacity to support EU economy. There was also an emphasis on making it easier for banks to fund infrastructure projects and thereby to support investments.

EU financial services framework 

The European Commission also published the results of the Call for Evidence on EU financial services looking at the cumulative effect of the new financial sector rules put in place since the financial crisis. The  Commission has concluded that overall the financial services framework does not need to be changed. However, targeted follow-up actions to fine-tune the framework are proposed in four areas:

  • Removing unnecessary regulatory constraints on financing the economy.
  • Enhancing the proportionality of rules.
  • Reducing undue regulatory burdens.
  • Making rules more consistent and forward-looking.

The Commission will monitor progress in the implementation of the respective policy commitments and will publish its findings and next steps before the end of 2017.