Chancellor George Osborne’s Autumn statement has received a mixed reaction after he revealed the well trailed help-to-buy schemes for first time buyers being in part paid for by a 3% rise in stamp duty on second and buy-to-let homes.
Osborne believes the rise in Stamp Duty will raise close to an additional £1 billion over the next five years. He also expects the first sales of housing association Right-to-Buy sales to happen through pilot schemes in 2016
First time buyers in London will now be able to receive a loan of up to 40% from the Treasury and those buying one of the 200,000 new Starter Homes of the 400,000 new homes to be built will receive a discount of 20%. Limits on shared ownership have also been lifted with anyone earning less than £80,000 (or £90,000 in London) able to buy part of a home and pay rent on the rest, with rents capped at 3% of the remaining value.
Rob Clifford, Executive Director at property services provider Shepherd Direct which includes advisory firm, Moneyquest, and estate and lettings agent franchisor, CENTURY 21 UK, is cautiously optimistic.
Rob Clifford said: “Clearly the major issue confronting the UK housing market is lack of supply at present and therefore it is very positive to see the Government upping its commitment to getting more homes built, especially of the affordable variety.
“The Help to Buy scheme has been an undoubted success since launch and therefore the expansion of Help to Buy: shared ownership should boost this important part of the market. The commitment to build 400,000 ‘affordable homes’ will make a huge difference if these figures can be achieved, however we have to ensure the land is available and that house builders across the country have the resources in order to make this happen.
“Unfortunately, this can be a slow process and, even with a strong tail wind, there could be major issues with getting these types of homes and developments built within the timescale the Government wants.
“Of course the housing market is not just one of home-ownership. Even with ‘affordable options’ and discounts provided to purchase, there will still be many individuals who are unable and or simply unwilling to purchase.
“This is where the private rental sector also needs to be supported and we are heavily involved in a project where we let and manage up to 6,000 new-build rental homes currently being built.
“As with all these schemes and announcements, the proof of the pudding will be in the eating, and if these targets can be achieved then the UK housing market will be going some way to filling the gap that exists.
“Increasing supply remains key if we are going to have a UK housing market fit for purpose and therefore I suspect this type of commitment will need to be grown and developed over the years ahead if we are going to keep up with demand.”
Meanwhile Mark Hayward, Managing Director at the national Associatino of Estate Agents said: “We must applaud any – and all – initiatives to increase housing supply, however, what we need is next day delivery, not the promise of a cheque in the post.
“The announcement continues to talk about the ‘why’ and the ‘when’ but we simply don’t have the ‘how’ and the ‘where’. The house building industry is desperately short of human resource and if we are to get Britain building the number of new houses required, we need to address this problem to create actual homes and not aspirational targets.
“Those able to access this so called ‘affordable housing’ still require some pretty hefty incomes to qualify and with wage inflation still being significantly outpaced by house price inflation, the plight of the first time buyer (FTB) will only be compounded over the next five years.”