Fixing the broken housing market?
In recent months, Ministers have admitted that the Government is behind schedule in its aim to build one million new houses by 2020. 250,000 new homes are needed per year, to keep up with demand. The Government, in their recent White Paper, proposed a number of strategies in an attempt to alleviate the housing crisis and achieve their 2020 goals.
The Government is giving Local Councils powers to pressurise developers to start building on land they own, ensuring that land is not left unbuilt upon for a number of years, whilst the demand for housing continues to grow.
Going forward, Local Councils will be required to update and keep under review their plan for housing demands and will be held accountable for continuing failure to meet their new homes targets.
The Government will be encouraging the building of high rise buildings where development land is sparse, such as in city centres. Developers must avoid low density housing where land availability is short, ensuring that they utilise the land as efficiently as possible.
There are plans to reduce the time between the granting of planning permission and the commencement of a development. Currently, developers have 3 years commence development following the granting of planning permission. However this has been reduced to 2 years. The Government acknowledged that despite increasing the number of new homes, Green Belt land must be protected. Councils must ensure that Green Belt land is only built upon in exceptional circumstances.
There are a number of aids to help first time buyers purchase their first home. The Government have introduced the Lifetime ISA, which will help first time buyers save for a deposit. The Lifetime ISA is available to 18 to 40 year olds, and for every £4 deposited, the Government will provide a bonus of £1. These are similar to Help to Buy ISA’s, however with the Lifetime ISA, the Government will provide a maximum of £3200 in bonuses.
“Starter homes” are also to be offered to first time buyers. To be eligible, first time buyers must be aged between 23 and 40 years old, they must be obtaining a mortgage, and the household income must be no more than £80,000.00 (£90,000.00 or less in London). Starter Homes are sold with at least a 20% discount. If the property is sold within 15 years, all or some of the discount must be repaid. The Government’s intention is that at least 10% of all larger developments must be Starter Homes.
The Government is introducing strategies to help those renting properties. It has pledged to make renting more family friendly, with longer tenancies and the ban of letting agents’ fees. Banning orders are also to be introduced to ensure the worst landlords and agents are prohibited from operating.
The Government has acknowledged that the housing crisis needs to be dealt with and that strategies must be put in place to help first time buyers. It is hoped that the proposals within the recent White Paper are one step closer to fixing the broken housing market.
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