Budget 2014: Help to Buy ‘will further inflate prices’
Help to Buy, Right to Build, stamp duty and £150m for the regeneration of large housing sites all featured in the Budget as the Chancellor attempted to show that the Government was putting housing issues front and centre in its agenda.
Key people in the North West's residential sector responded to the announcements:
Peter Nears, strategic planning director at Peel Group, said: "The announcements in the Budget such as the four year extension to Help to Buy and the launch of the Builders Finance Fund to help small-to-medium sized housebuilders unlock sites does emphasise that the Government is focusing on housing as a sector that can drive the economy and contribute towards regeneration objectives.
"It is noticeable that some schemes referenced, such as Barking Riverside, Ebbsfleet and Cambridge tend to be concentrated in the south of the country, as areas that have a pro-growth agenda. It is important in the North West that we prioritise putting together schemes that show the same potential and are aspirational and can capture the attention of the Government."
Scott Neal, marketing manager of Salford-based developer and regeneration specialist, LPC Living, said: "The changes to the Stamp Duty system announced by the Chancellor are designed to discourage foreign investors from buying up swathes of residential properties and leaving them empty at the expense of local people. That's to be applauded but the reality is this is likely to only benefit London and affluent parts of the south.
"We'd have liked to have seen the taxes raised by this new initiative used to offset levies at the bottom rung of the ladder where buyers are taxed 1% on any home between £125,000-£250,000. This could have been in the form of a Stamp Duty holiday or a permanent increase in the threshold at which SDLT is applied.
"From talking to our customers – many of them hard working families with young children – the feeling is Stamp Duty is a grossly unfair tax at a time when they face enough challenges getting on the property ladder."
Gwen Heap, head of operations at procurement clubs Re:allies and Procure Plus, said: "2014's Budget demonstrates a continued lack of measures taken by our Government to provide a sustainable construction and housing sector. We support the Chancellor's pledge to 'keep Britain building' and his commitment to local economies, apprenticeships and social enterprise but the announcements made do not do enough to address the housing shortage or make the link between demand and support that could so easily make our communities a better place to live.
"Extending Help to Buy until 2020 will inflate the housing market further while hindering those Registered Providers now forced to fulfil increased housing demands in their community with decreased income. The impact of this announcement may well serve to stifle the green shoots of affordable housing we have only recently begun to see grow here in the North West and beyond."
David Lathwood, lead director for the North West at JLL, said: "Help to Buy has been a huge boost to the residential market so its extension provides developers with forward guidance to help direct their development programmes for the medium term. The barriers they now face come from the planning system, which is holding up the delivery of new homes. This is the real source of the inflationary pressure on prices. The North West needs 17,500 new homes a year by our estimates and current building levels are still some way off this target."
