There has been a shift in policy, from pure homeownership to ensuring that Britain builds more homes of all tenures
Just three months in to her premiership, Prime Minister Theresa May is putting homes, housing and new-build at the forefront of her strategy to tackle social fairness.
Speaking at the recent Conservative Party Conference, May acknowledged that high housing costs – and the growing gap between those on the property ladder and those not – lay at the heart of the UK’s declining social mobility, falling savings and low productivity.
And it seems there has been a shift in Tory housing policy, from the pure homeownership idea of David Cameron and George Osborne to ensuring that Britain builds more homes of all tenures.
The good news for our industry is that May gave further endorsement of the Help to Buy Equity Loan and Shared Ownership schemes. With the former already the vanguard of new-build sales and the latter growing steadily, this bodes well for builders and intermediaries over the rest of this Parliament.
“We need to build more homes,” said May, and indeed it has become a moral duty to do so. There is clear recognition of both the dysfunctional nature of the market and the power of government to facilitate change.
The Help to Buy Equity Loan scheme has been a huge success since its launch in England in 2013, accounting for around 40–50 per cent of sales on many new development sites. Almost 92,000 completions have been achieved to date and the second quarter of 2016 set a record with 10,721 completions, up 15 per cent from Q2 2015, according to figures released by the Department for Communities & Local Government.
Data from our national network of specialist new-build advisers confirms there has been little let-up since the EU referendum in June, with new sign-ups continuing at a buoyant rate.
In England, more than 160,000 buyers have completed purchases using either the Equity Loan or the Mortgage Guarantee scheme. According to the Bank of England, the planned closure of the Mortgage Guarantee scheme in December is unlikely to cause market disturbance. It is imperative that intermediaries clarify this change with potential clients because the general media have not been clear on this subject, with some headlines referring simply to “the end of Help to Buy”.
One scheme not mentioned at the Tory Conference was Starter Homes: the big housing plank of the previous government, launched as an idea two years ago. The scheme was intended to provide an additional 200,000 homes for first-time buyers.
However, all is not lost as new housing minister Gavin Barwell says he is considering the scheme’s redefinition. Hopefully it will be resurrected to provide the much needed affordable homes for which it was intended.
All the new initiatives and additional funding to build more homes in Britain will be announced in a Housing White Paper later this year and no doubt will feature heavily in the Chancellor’s Autumn Statement on 23 November.
Andy Frankish is new homes director at Mortgage Advice Bureau