First-time buyer support expected to continue
The Conservatives won a majority in Thursday’s general election and are expected to implement new policies outlined in their manifesto.
This includes the launch of a starter homes programme which is expected to create 200,000 new properties for first-time buyers. However Brian Murphy, head of lending at Mortgage Advice Bureau, has warned that this alone will not be enough to solve the housing crisis.
“The scheme is beneficial in that it is specifically designed to encourage construction on brownfield sites, which are largely disused. Housebuilders taking part in the scheme will not have to pay the usual fees to local authorities: an added incentive for the construction industry,” he said.
“Unfortunately, an injection of 200,000 new homes is a drop in the ocean compared to the number of new properties that we need. The estimate is that we have to build 250,000 new homes per year just to keep up with demand and avoid excessive house price inflation.
“For the 200,000 first-time buyers who take advantage of this scheme, it’s a great policy – but if the imbalance between supply and demand is not properly addressed, there will be many more struggling to access the property ladder.”
The Help to Buy mortgage guarantee scheme is currently set to end in December 2016 and it is expected an announcement on its future will be made in due course.
The Conservatives will also extend the Right to Buy scheme, as set out in the party’s manifesto.
“This policy will also require that councils sell their most valuable 210,000 properties from their remaining housing stock,” added Murphy.
“However, as yet there isn’t a dedicated plan in place to replace these properties. This will mean a shortage of social housing for tenants that can’t afford to buy and greater pressure on the current housing shortage.”