Many of us had been waiting with baited breath to see what Wednesday’s Budget would deliver. After weeks of speculation and hearing about how the Tories were classing the ‘UK housing crisis’ as a priority, all was finally revealed.
We will discuss and summarise here, the relevant points made in relation to housing in the UK.
Time to look forward not backwards
Highlighting the demand for homes and the increasing impossibility of becoming a home owner, Philip Hammond provided a core statistic: in the age bracket Age 25-34, only 38% are homeowners. This in itself speaks volumes about the difficulty in the home buying process.
It is understandable after the effects of 2008 that 100% mortgages appear to be a thing of the past. However, as the rate of inflation increases, the level of wages has stagnated. In many cases, this has resulted in a decrease of surplus income for those trying to save for a deposit. As a result, achieving a deposit, plus the various other costs in buying a property has increasingly challenging.
It is a relief therefore that the government appear to have recognised this.
Steps forward
There has been a lot of discussion recently about the over inflation of property prices in some areas due to much needed property being withheld for commercial purpose. This is linked to an increasing number of sites sitting on approved planning permissions but with no purpose of development.
The government have proposed a review between the gap of planning permissions and housing starts. If needed, the government will now impose powers to intervene.
This of course, will be a complicated process. However, it should drive down some of the costs of acquiring the much needed land for development and drive down the overall costs of some of the new builds.
In addition, the government have pledged £44 billion over the next 5 years to support the UK housing market. This will aid the production of 300,000 new homes per year on average. If this is achieved, it will be the biggest increase in housing since the 1970s.
£8 billion has been pledged to support private rentals and the supported housing sector. There was an impetus on the building out of our towns and cities and protecting our green land.
“The dream of home ownership will become a reality in this country again” – Philip Hammond
The item that appeared to gain the greatest reaction across the commons was the abolishment of Stamp Duty Land Tax (SDLT) for first time buyers.
Philip explained that for all first time buyers purchasing a property up the value of £300k, there will no longer be any SDLT payable. This is a huge saving to first time buyers and may assist in making home ownership more achievable.
When we draw upon the notion of shared ownership properties or the help to buy schemes available which both reduce the required monthly income and savings required, it does seem that more individuals may now achieve that goal.
In summary
There certainly did seem to be a focus on housing and catering for the millennials who are struggling to own their own properties. However, it will take time to see if the plans take effect.
Of course there are those who aren’t even in a home, whether it be owned or rented.
The government are creating taskforces to tackle homelessness in three main affected areas in the UK as part of the Homelessness Reduction Act. This is the start to the notion that the government aim to abolish homelessness altogether. This is a high promise, but one we can all try to hope for.
It’s an interesting time, we all hope to see more people in suitable homes but it’s going to be quite a journey.
