A new strategy to tackle the housing shortage, boost the economy, create jobs and give people a lift onto the housing ladder was revealed yesterday.
The move recognises the impact that the deflated housing market has had on the UK economy, including a collapse in the construction industry.
The measures were announced by the Prime Minister and Deputy Prime Minister who both plan to break the vicious cycle where lenders won’t lend, builders can’t build and buyers can’t buy.
Key to the new strategy is a build indemnity scheme, where up to 100,000 prospective homebuyers will be able to secure loans on newly built homes with a deposit of just five per cent. The Government and housebuilders will help to provide security for the loan, meaning that if the house is sold for less than the mortgage total, the lender will be able to recover any losses.
Housebuilders will in turn receive support for building affordable housing. The Affordable Homes Programme will provide access to a pot of almost £1.8 billion towards development. The first £1 billion of which has already been confirmed, and puts the Government on track to deliver up to 170,000 new affordable homes over the next four years.
There will also be support for existing projects that have ground to a halt, in the form of a £400 million Get Britain Building funding pot. Plus, self-builders will gain access to a £30 million funding pot to support short-term project funding on a repayable basis.
Other measures to form part of the strategy include improving fairness in social housing, supporting the private rented sector through tax rule changes on buy-to-let purchases, and action on empty homes.
The strategy has been met with support, particularly the indemnity scheme. Paul Broadhead, head of mortgage policy at the Building Societies Association said: “We welcome the Government’s support for a new build indemnity scheme initiative aimed at helping those with a modest deposit buy their own home.
“This joined up thinking from mortgage lenders, builders and the Government is good for borrowers, the housing industry and in turn jobs.”
Meanwhile, Royal Institute of Chartered Surveyors (RICS) spokesperson Michael Newey said: “RICS welcomes the Government’s Housing Strategy and hopes that the proposals can go some way to boosting the stagnant housing market. Given its central role in driving economic growth, it is right that housing is now at the top of the political agenda.”