Government attempts to thaw housing
Property professionals broadly welcomed a round of intervention by the government into the frozen residential market but called for further action.
The package of plans is aimed at adding 450,000 new homes into the market. Right to Buy Proceeds will be used to build 100,000 homes. Public sector land will be offered to developers on a 'build now, pay later' basis. There will be a new mortgage indemnity guarantee scheme where the government will underwrite mortgages up to 95% of the value of the house, and a £400m fund to target house-building schemes. The fund will allow 16,000 homes to be built, of which 3,200 will be affordable. It will also invest in a ready-to-go construction sites that satisfy government criteria.
The £400m Get Britain Building Investment Fund will be managed by the Homes & Communities Agency.
Deborah McLaughlin, director of the North West at the HCA, said: "Our work with local partners has demonstrated that unlocking stalled sites, bringing empty homes back into use and helping those who aspire to home ownership or need flexibility and choice is at the heart of what providers are striving to achieve. The Housing Strategy sets out a clear framework to help partners realise these aspirations and the HCA will continue to use our commercial expertise and work strategically with local partners to help boost the housebuilding industry, creating new quality homes and jobs and contributing to economic growth."
Greg Mulligan, director of Mulbury Homes, based in Lymm, Cheshire, said: "Steps to help first time buyers secure new homes with lower deposits will, in principle, boost the stagnating housing market, but with many banks still taking an ultra cautious approach on mortgages I'll be interested to see how the Government and house builders can get funders to commit to the scheme on a scale required to have a real impact.
"The £400m pot of funding to help restart stalled construction projects, on top of money already committed, is a welcome measure. Measures to improve fairness in social housing, take action on empty homes, and support the private rented sector are long overdue and will also be welcomed.
"However, at a time when we're facing a chronic housing shortage, and where generating activity in the housing market is the key to restoring economic growth and confidence, I believe the effectiveness of the housing strategy will ultimately be judged on the number of new homes delivered."
Steven Verity, CBRE director of Northern residential development consultancy, added: "I think this news will be welcomed if there is a clear coherent plan in place and not just an array of ideas. The proposed £400m fund to kick start development will help to help alleviate the UK housing shortage and support the construction industry, which has been severely hit by the recession.
"The focus on affordability will benefit communities and first time buyers entering the housing market. However it needs to produce a range of housing in a broad spectrum of areas of the North West. The emphasis should also be on public sector land release for development. This shortage is restricting supply just as much as mortgage availability. At the moment, there is very little happening in the North West.
"The strategy has the potential to be very successful however the right measures need to be put in place to ensure land is released in a variety of areas to benefit all sectors of the public."
Brian Simpson, chief executive of housing association Wirral Partnership Homes, said: "To be fair to the government, there is plenty contained within the new housing strategy that at first glance at least, attempts to support the notion that 'housing is crucial for our social mobility, health and wellbeing.' So surely any initiative that encourages the building of new homes, thereby boosting economic activity and helping tackle the many social challenges is to be welcomed?
"The government has certainly put the housing crisis back at the centre of political debate, which illustrates what many of us have always known, that housing is fundamental to society and that new building has been inadequate over recent years.
"We need more detail as to just how much extra money will be made available for new homes, in the right location and with the right infrastructure; how many first time buyers will benefit from indemnified 95% mortgages; how many self build schemes will actually materialise and how a reinvigorated Right to Buy scheme will undertake the urgent need for new affordable housing rather than benefit those who happen to find themselves in the right place at the right time. I am concerned that following the new generous discounts being proposed there will be insufficient funds to build replacement housing. The major focus in the document appears to be on encouraging home ownership rather than on the provision of new affordable housing particularly social housing, be it for rent or through low cost home ownership.
"For housing associations we need to look at the detail contained in the strategy and see where we can help make a difference by providing more social housing and help lessen the demands placed on the private sector."