This article was first published in Property Week on December 3, 2015
The chancellor’s Autumn Statement will have been welcomed by homebuyers and housebuilders alike for the extension of the Help to Buy scheme.
This includes removing local authority restrictions on the people who are eligible for shared ownership, extending equity loans to 2021 and introducing a new London equity loan scheme for up to 40% of the value of new-build houses.
First-time buyers would also have found cheer in the proposed stamp duty land tax surcharge for second homes - an initiative intended to level the playing field for them. However, there is still the small matter of saving for a 5% deposit before a homebuyer can benefit from Help to Buy and this will remain out of reach for a significant section of the population. The new Help toBuy ISA might help with this, but, fundamentally, affordability and supply remain the key issues in the current housing crisis.
On those issues, the chancellor has promised 400,000 new affordable homes by the end of the decade; 200,000 of these will be starter homes sold at a 20% discount of market value to the under-40s and most of the remainder will be shared ownership housing. The chancellor also opened the door for the private sector to play a part in delivering this form of affordable housing, enabling them to bid for government funding.
To help bring these and other homes forward, the government will ensure the release of more public sector land for housing, introduce planning policy changes to allow the release of unused commercial, retail and industrial land for residential schemes that include starter homes and to support the regeneration of brownfield land in the green belt where starter homes are proposed. The chancellor also highlighted other reforms such as a new local plan delivery test for local authorities, changes to the New Homes Bonus to provide greater incentives for local authorities and other proposals in the Housing and Planning Bill currently before parliament.
A common theme of the chancellor’s announcements was the desire to support working people in their aim to buy a new home. It is difficult to find much that will tackle the problems of supply and affordability of rental accommodation for those people who want to (or need to) rent. Surprisingly, there was nothing in the Autumn Statement to help landlords and investors to invest in the private rented sector (PRS); this was a key part of the coalition government’s housing strategy, yet the term ‘PRS’ does not appear once in 154 pages of the HM Treasury publication.
There is no doubting this government’s commitment to housebuilding - certainly it has put the need to increase supply at the forefront of planning policy and legal reform. However, it cannot tackle the problems of affordability and supply by putting all its eggs in the basket of low-cost home ownership. We need homes for rent to be part of the solution as well.