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The UK is to see an increase in the supply of new starter homes to be exclusively offered to young first time buyers under the age of 40, it has been announced by the government at the opening of the new parliament. The Queen’s Speech included a number of issues relating to the nation’s property markets which have been met with a positive reaction. The new starter homes for first time buyers will be offered at a 20% discount below their open market value and the current Right to Buy levels of discount will be extended to 1.3 million housing association tenants. To help with the chronic lack of housing local authorities will be required to dispose of high value vacant council houses which would help fund the Right to Buy extension discounts and the building of more affordable homes. The government will also take forward the Right to Build scheme, requiring local planning authorities to support custom and self builders registered in their area in identifying suitable plots of land to build or commission their own home. A statutory register for brownfield land will be introduced to help achieve the target of getting Local Development Orders in place on 90% of suitable brownfield sites by 2020. Along with this the neighbourhood planning system will be simplified and speeded up to support communities that seek to meet local housing and other development needs through neighbourhood planning. The reaction from the property and housing industries has been positive as all agree that there is a pressing need to build hundreds of thousands of new homes across the country and particularly in London. However, Adrian Gill, director of Your Move and Reeds Rains estate agents, questioned whether these new schemes are setting sights high enough. ‘Building a home in Britain is about 18% more expensive than in Ireland, for example. Preliminaries like planning fees account for 12% of the total costs in the UK, compared to 10% in Ireland. Reforming the red tape surrounding the house building process may be one of the only safeguards around steadier house price rises,’ he said. ‘Home ownership is still a key life milestone and aspiration for UK households, so any measures that bring this goal closer into view will be very welcome. The Right to Buy extension sounds good on paper –but we’ve yet to see how this will translate in practice, and the reality is that authorities will have to sell off existing stock first before they can fund and deliver this new promised land of affordable properties,’ he explained. ‘At the same time, tenant demand for housing will be accumulating, and this could spill over into the private rented sector, and artificially push up prices and competition for rental homes,’ he added. According to Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association (IMLA), the government must work swiftly with the mortgage industry to ensure finance is available to help consumers with their purchases. ‘If not,… Continue reading →
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