Home ownership and the construction of new properties have already proved to be hot topics at this year’s Autumn Statement and the press has already hinted towards several changes that could be in store. The latest measures are thought to be targeting generation rent and the possibility of introducing new “Buy As You Go” measures for council tenants. Could building to meet rental demand be the right answer to the UK’s chronic housing shortage?
The Government introduced the Home Building Fund on 4th October 2016, replacing the old Build to Rent Fund. The idea was to enable more housebuilders, small and large, to have access to the finances needed to build new homes. However, at the last Autumn Statement, the Chancellor pledged to offer a £120bn investment to support infrastructure projects such as the building of new homes. The new Home Building Fund has been allocated just £3bn, but it is hoped that money will build 25,000 new homes by 2020.
It may not seem a lot, but there appears to be further housing stock on the horizon. According to recent news the National Housing Federation could soon have the powers to build 335,000 new homes in the next four years that are geared up for the new “Buy As You Go” scheme.
Aimed at council and social housing tenants, Buy As You Go is thought to be ramping up Government interest, would give tenants a chance to build up equity in their homes, through the rent they pay, so that eventually they can own their homes outright.
This is just one of the measures thought to help tackle “Generation Rent” – those who are not able to save enough money or apply for a mortgage so that they can get on the housing ladder. Private renters pay around 47% of their take home pay to landlords and with tenants in London facing 25% rent rises in the next five years, those on a low wage have little hope of owning homes of their own.
But, it appears that the Government’s focus is not solely on homeownership in efforts to address the county’s chronic lack of supply. Building more homes will help address the issue – but some experts have warned that focusing on policies that only encourage ownership could actually prevent homes from being built.
The comments came from a recent conference, where Gavin Barwell MP was questioned about the Government’s plans to deliver 200,000 starter homes by 2020. He replied that there could be some tension between overall supply and demand objectives, specifically to help people on the housing ladder and there could be room to allow other tenure types, such as discounted rental schemes, that would be aimed at those seeking more secure rental terms and living conditions.
The ways property is made available in the UK needs to be more affordable to both renters and buyers – the only answer is to provide more homes. The Autumn Statement is the Chancellor’s opportunity to outline plans to tackle this housing shortage for a long term solution, not just for short term satisfaction.
At DMH Stallard, we will be watching closely on the day and we are here to help if any new laws relating to property and construction might affect you. You can find out more about our legal services in the property and real estate industry via our web pages, or get in touch for more information.