The UK is set for an increase in supply of new starter homes for young first time buyers, revealed the Queen’s Speech last week.
A number of property issues were mentioned in the opening of the new Parliament on Wednesday, which have received a positive reaction from property experts.
First time buyers under 40-years-old will be offered new starter homes at a 20% discount of their open market value. The Right to Buy scheme will also be extended to 1.3m housing association tenants.
Property Industry Welcomes Housing Bill
The Government is also going ahead with the Right to Build scheme, which requires local planning authorities to support self builders registered in their area in finding suitable plots to build or commission their own homes.
A statutory register of brownfield land will also be introduced, in a bid to achieve the aim of getting Local Development Orders in place on 90% of all appropriate brownfield plots by 2020.
Furthermore, the neighbourhood planning system will be simplified and sped up to help communities meet local housing and development needs.
The property and housing industries have reacted positively and they agree that hundreds of thousands more homes needs to be built, especially in London.
But Director of Your Move and Reeds Rains estate agents, Adrian Gill, wonders whether these new schemes are enough: “Building a home in Britain is about 18% more expensive than in Ireland, for example. Preliminaries like planning fees account for 12% of the total costs in the UK, compared to 10% in Ireland. Reforming the red tape surrounding the house building process may be one of the only safeguards around steadier house price rises.”
He adds: “Homeownership is still a key life milestone and aspiration for UK households, so any measures that bring this goal closer into view will be very welcome. The Right to Buy extension sounds good on paper, but we’ve yet to see how this will translate in practise, and the reality is that authorities will have to sell off existing stock first before they can fund and deliver this new promised land of affordable properties.
“At the same time, tenant demand for housing will be accumulating, and this could spill over into the private rented sector and artificially push up prices and competition for rental homes.”1
Chairman of the Intermediary Mortgage Lenders Association (IMLA), Charles Haresnape, believes the Government should work quickly with the mortgage industry to ensure finance is available for consumers: “If not, we will be left with more schemes that are implemented in a hurry with lenders and brokers having to play catch-up.”
He is also unsure about the Help to Buy mortgage guarantee scheme, which could hold no certainty for the future: “Reviving Help to Buy certainly promises another short term boost to homeownership, but there must be a more joined up approach to increasing the long-term housing supply rather than focusing on short-term demand.”1