At the beginning of this year, Prime Minister Theresa May announced at a London planning conference that it was her personal mission to, 'restore the dream of home ownership'. She said: 'For decades this country has failed to build enough of the right homes in the right places'. In order to address this pressing issue, the Government has introduced several measures to make home ownership more affordable.
Stamp Duty
In November 2017, the chancellor Philip Hammond made changes to stamp duty charges for first time buyers. Stamp duty was abolished completely for houses up to the value of £300,000 and on the first £300,000 of houses worth up to £500,000, with an average saving of £1,660. However, the Government's Office for Budget Responsibility has warned these changes may in fact increase house prices and anticipate that only around 3,500 extra house purchases will be made yearly as a result.
Affordable Homes
Prime minister May also pledged to make it harder for, 'unscrupulous property developers to dodge their obligation to build homes local people can afford'. She promised to ensure the building skills and the land would be made available for the construction of homes: in return she expects developers to 'do their duty to Britain and build the homes our country needs'. In particular, she addressed developers who construct small numbers of expensive homes, rather than building larger numbers of affordable homes: 'It is time to step up do your bit'.
Urban Regeneration
In the pursuit of urban regeneration, the Government plans to increase housing density in areas of high housing demand. To this end, they plan to encourage the regeneration of abandoned sites within town centres, by converting them into high quality housing which will be located close to transportation and other amenities.
Local Councils and Home Construction
The Government also plans to set targets for local authorities on home construction. Affordable homes will prioritised for key workers such as teachers and nurses and the councils will be given powers to enforce this. In addition, just as the Local Government Association announced that planning permission was granted for 420,000 new homes not yet built, the housing secretary proposed that local councils be granted the power to remove land from developers who do not build on their sites.
However, local councils could do more with the powers and money they already have. For example, it was recently reported that 98% of local councils in England describe their need for affordable homes as ranging from moderate to severe. Yet, some of these same councils are sitting on millions of pounds which were given by them by developers in lieu of building affordable housing within a new development. This money should be released to construct housing.
Creating Home Owners
Ultimately the combined aim of these Government and local council strategies is to create an era of increased house building and to bring home ownership into the reach of those who currently desire to step onto the housing ladder but due to the current housing climate are priced out of the market. Hopefully these policies will go some way to mitigating against the Resolution Foundation report which states that 'up to a third of millennials will never own a home'.
Simon Nosworthy is head of residential property at Osbornes Law
