- Chancellor pledges £7bn to building 400,000 new homes across UK
- 200,000 starter-homes for first-time buyers will be built
- £4bn going to housing associations, local authorities and private sector
- Housebuilding programme ‘biggest since the 1970s’, Chancellor says
- Stamp duty to rise 3% for buy-to-let homes
- Introduction of London Help to Buy Scheme, with 40% loan
- Five housing associations will introduce Right to Buy from midnight tonight
- Critics question whether policies will work for people on low incomes
Chancellor George Osborne has pledged £7billion to house-building with the aim of creating 400,000 new homes.
In his Autumn Statement and Spending Review, Mr Osborne claimed he is tackling the ‘crisis in home ownership’ head-on with the ‘biggest housebuilding programme since the 1970s’.
The Chancellor announced plans to build 200,000 new starter-homes over the course of this Government aimed at first-time buyers under 40 at a 20 per cent discount.
Plans to build: Chancellor George Osborne has pledged £7billion to house-building with the aim of creating 400,000 new homes
The Chancellor aims to turn ‘generation rent into generation buy’ and said: ‘In the end, spending reviews like this come down to choices about what your priorities are.
‘And I am clear: in this Spending Review, we choose housing. Above all, we choose homes that people can buy.
‘For there is a crisis of home ownership in our country.
‘We made a start in the last parliament and with schemes like Help to Buy, the number of first-time buyers rose by 60 per cent.
‘But frankly we need to do much more. Today we set out our bold plan to back families who aspire to buy their own home.’
Around £2.3billion will be paid directly to developers to build the starter homes, who will get a 20 per cent discount on prices up to £450,000 in London and £250,000 elsewhere.
The houses will then be sold after five years, with tenants being given first refusal.
Funding totalling £4billion will go to housing associations, local authorities and the private sector to provide 135,000 Help to Buy shared ownership homes by 2021.
|Region||August-October 2015||August-October 2014|
|Yorkshire & the Humber||1,821||2,368|
|Scotland – Councils||3,049||3,593|
|Wales – Unitary Authorities||1,050||1,275|
|Northern Ireland – Councils||995||691|
|Totals for UK||37,582||37,707|
According to the Government, this will make shared ownership available to a wider group of people than current shared ownership products.
The properties will be available to households earning less than £80,000 outside London and £90,000 inside the capital.
Around 8,000 specialist homes for older residents and people with disabilities will also be built using £400million of funding for housing associations and the private sector.
MORTGAGE MARKET NEWS
The number of mortgage approvals in October was 27 per cent higher than a year ago, with remortgaging up 34 per cent and house purchases up 21 per cent, the BBA said.
Gross mortgage borrowing in October was £12.9billion, 26 per cent higher than a year ago and the highest since August 2008.
The Chancellor also announced a 3 per cent rise in stamp duty for second homes and buy-to-let properties, noting current problems with high numbers of cash buyers.
While not revealing the housing associations involved, the Chancellor also announced that from midnight tonight five housing associations will be introducing the Right to Buy scheme.
A London Help to Buy Scheme was also announced. In the capital, first-time buyers will be able to get a 40 per cent interest-free loan rather than the 20 per cent under the current equity loan scheme. Buyers will still need a 5 per cent deposit.
Criticising the Chancellor’s plans, shadow housing minister John Healey said: ‘If hot air built homes, then Conservative ministers would have our housing crisis sorted.
‘George Osborne’s first act as Chancellor in 2010 was to slash housing investment by 60%, and his plans today could still mean 40% less to build the homes we need compared to the investment programme he inherited from Labour.’
Big builder: In his Autumn Statement and Spending Review, Mr Osborne claimed he is tackling the ‘crisis in home ownership’ head-on with the ‘biggest housebuilding programme since the 1970s
Having recently raised concerns that more people will be pushed into the lower end of the private rental sector under the Government’s Right to Buy Scheme, housing charity Shelter said today that the ‘key test’ for Osborne’s measures measures will be whether they work for people on average and lower incomes.
Campbell Robb, Shelter’s chief executive, said: ‘Home ownership schemes like starter homes or shared ownership won’t work for everyone, so building more genuinely affordable homes to rent is still absolutely essential.
‘Especially when there are still plans to force councils to sell of large swathes of their social housing stock.
‘Our shortage of affordable homes means that thousands of working families depend upon housing benefit to help them cope with sky-high rents.’
Jeremy Blackburn, head of policy at the Royal Institution of Chartered Surveyors, shared Shelter’s sentiments: ‘A push towards affordable home ownership should not come at the expense of affordable homes for rent.
‘If cities such as London are to thrive, we need to ensure that housing can be provided for all of its workforce – home ownership can only go so far and even shared ownership may prove too expensive for some. We would like to see the Chancellor incentivise affordable homes for rent in both public and private sectors.’
Meanwhile, Chris Walker, head of housing at Policy Exchange, said that previously, the majority of government grant money for affordable housing has been provided to housing associations to build for social or affordable rent, whereas now, the Chancellor is setting out plans for affordable homes to own or part-own.
Walker said: ‘Today’s announcement isn’t the silver bullet that will solve the housing crisis as the Government will need to further reform the planning system to ensure enough land is released for development.’
The number of new homes being built and registered in the last three months remained broadly flat compared to the same period last year, latest figures show. But in October there were 16,434 new homes registered, a 17 per cent increase from the same time last year, the National House-Building Council said.
First-time buyers: The Chancellor announced plans to build 200,000 new starter-homes aimed at first-time buyers under 40 at a 20 per cent discount
Between August and October, there were 37,582 new homes registered, including 30,046 in the private sector and 7,536 in the public sector.
During the same three months last year, there were 37,707 new homes registered, the findings suggest.
OSBORNE’S HOUSING ANNOUNCEMENTS IN BRIEF
– Budget for housing to double to £2billion
– 400,000 new homes to be built across England
– 200,000 starter-homes aimed at first-time buyers being built, which will be available for buyers under 40 at a 20 per cent discount
-135,000 of new homes built will be used for the Help to Buy Scheme, where shared ownership options will be available
– £2.3billiion will be paid directly to developers to build the starter homes
– 8,000 specialist homes for older and disabled people being built
– £4billion going to housing associations, local authorities and the private sector to provide 135,000 Help to Buy shared ownership homes by 2021
– 3% increase on stamp duty for second homes and buy-to-let properties from next April
– Introduction of London Help to Buy Scheme, which will give a 40 per cent interest-free loan rather than the 20 per cent under the current equity loan scheme. Buyers will still need a 5 per cent deposit.
– Five housing associations launching Right to Buy scheme for housing association tenants from midnight tonight. The five associations has not been revealed.
While registrations between August and October remained broadly flat compared to a year earlier, in October 16,434 new homes were registered, 12,965 in the private sector and 3,469 in the public sector.
October’s figures mark a 17 per cent increase in home registrations compared to the same point last year.
One potential reason for October’s boost, according to the research, is that builders registered new homes in time to take advantage of the lower rate of Insurance Premium Tax which increased by 3.5 per cent on 1 November.
Mike Quinton, chief executive of NHBC, said: ‘The last three months have seen new home registrations in line with the corresponding period a year ago.
‘However we expect to be reporting growth for 2015 as a whole, as the first 10 months of 2015 show a 10% increase in registrations compared to the same period last year.’
In the West Midlands, while 3,351 homes were registered between August and October 2014, in August to October 2015 only 2,788 were registered.
In Greater London, 6,464 new homes were registered between August and October last year. This year, that figure has fallen to 5,876.
But, in East England, the number of new homes registered has increased by 62, the data reveals.
Across Northern Ireland, 691 homes were registered between August and October last year, rising to 995 this year.
In the South East, 5,380 new homes were registered in the three months to October 2014, while 6,022 have been registered in the corresponding period this year.
According to recent data from the Office for National Statistics, average house prices in the UK reached a record high of £286,000, rising 6.1 per cent in the past year.
The ONS figures also revealed that first-time buyers now pay 4.3 per cent than they did a year ago, with the average starter home costing £216,000.
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