It’s been coming, and it’s long overdue, but the Government has finally announced its new Housing and Planning Bill, claiming that it is a ‘national crusade to transform generation rent into generation buy’. Debated in the House of Commons on 2 November, the Bill has now passed its second reading.
The Bill doesn’t really reveal anything that we didn’t know about already but it’s certainly reassuring to see the Government is ensuring that housing is still very much on the radar, and looks like it will continue to be so for the near future.
Nigel Glossop of Alexander James Mortgage Services discusses the details of the Bill and what you could expect to change.
The focal point of the Bill is to see a total of 1 million homes built by 2020, which is certainly no mean feat. Housing Minister, Brandon Lewis, claimed that more than 230,000 households have been helped into home ownership through Government-backed schemes in the last five years, but what are they planning for the future?
Starter Homes
Starter Homes are new properties that will be built on designated development areas, such as under-used commercial land or vacant sites, and will be available at a 20% discount to first-time buyers for properties worth up to a maximum of £450,000 within London and £250,000 around the rest of the country.
For affluent first-time buyers, this is certainly good news.
But, for those who are on low incomes, a 20% discount of the average cost of a new home to a first-time buyer (£215,000) would still leave them with a £172,000 mortgage.
First-time buyers put, on average, a 20% deposit down which would equate to £34,400 on this particular property – a large amount for buyers on low incomes.
So the question needs to be asked, is this scheme targeting the right people if it’s only well-off first-time buyers that will be able to utilise it?
Council plans
Local authorities are now required to provide the Government with local housing plans by 2017, or risk facing intervention.
If plans are not submitted, the Government will intervene to arrange for the plan to be written to ‘accelerate production’, according to Lewis’ statement.
Whilst anything that is set to speed up the delivery of local plans is welcomed, this does seem a little vague from Lewis.
There is no set deadline, other than the rather transparent ‘early-2017’, and what a Government intervention would actually consist of is still yet to be revealed.
Planning permission
Revealed by Chancellor George Osborne and business secretary, Sajid Javid, back in July, planning permission will automatically be granted to developers on brownfield sites to improve the rate of productivity.
Forming part of the Government’s Fixing the Foundations: Creating a More Prosperous Nation document, the policy is aimed at building new homes quicker, whilst continuing to protect green belt land.
This comes alongside the announcement that underused office buildings will also be turned into new homes, making the best of existing buildings that are under-used or neglected.
Publication of the Bill comes just days after the Government made the controversial decision to extend the Right to Buy scheme to a further 1.3 million housing association tenants from next year.
It’s certainly a time of change and action and, on the most part, the Government is doing what is required to aid the economy’s ongoing recovery and boost the lack of housing. However, there are still many holes that need plugging, particularly for those on low incomes who want to get on to the property ladder.
Until then, this is certainly a step in the right direction.
Contact us
Call Chancellors on 0330 404 9550 to discuss with our financial experts how this Bill may affect you.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.
Correct at time of publication. The views and opinions expressed herein are those of the individual contributor and do not necessarily reflect those of the Chancellors Group of Estate Agents Ltd or its subsidiaries. References to legislation, best practice and other matters with legal implications such as fees, rules and processes are included for information and editorial purposes only and are not authoritative, nor should they be interpreted as advice. When in doubt you should only take advice from an industry professional or solicitor where appropriate. E&OE.
