A strong economy should have a solid supply of homes for its population as this helps to create jobs and allows first-time buyers to have access to the housing market. This is why we welcome the Prime Minister's announcement of a Starter Homes programme in order to get the country building and create thousands of new homeowners.
There's been lots of talk about Labour's proposed mansion tax and how it will help reduce property prices and make things 'fairer', but we don't think this is the answer. Instead, upping the amount of property available is a sure-fire way to help even things out and ensure that first-time buyers get their foot on the ladder.
Soaring house prices and rents are testament to the fact that for years too few homes have been built in London, meaning that many people cannot afford to either rent or buy a home. This directly affects their ability to work in the city
The scheme will build 200,000 new homes for first-time buyers by 2020. Housing minister Brandon Lewis has told local authorities that they need to look at land considered "unviable" for housing and get a supply of sites suitable for housing and create top-quality well-designed starter homes. And in a bid to protect greenbelt land, these will be built on brownfield sites that were not previously ringfenced for development.
Planning obligations will be attached to permissions for starter homes, which will be offered for sale to first-time buyers under 40 at a minimum of 20% below open market price. However, buyers will not be able to resell or let the properties at open market value for five years.
As well as this, government figures suggest that there will be 232,000 more households per year in the UK up to 2033, with only 137,960 completed in 2013. The programme will help add to the 190,000-plus households that have already been helped by the government to buy or reserve a home since 2010 through schemes like Help to Buy and the reinvigorated Right to Buy.
Planning application processing
A consultation has also been launched on ways to speed up Section 106 planning agreements to deliver more homes. This sets out conditions that developers have to meet in return for being granted planning permission, such as providing more affordable housing or helping with transport links and infrastructure. The government wants to speed up the long-winded process and has proposed new measures, such as setting clear time limits so the homes are completed within the existing eight- to 13-week target for planning applications to be processed.
Property price predictions
Until the strategy to increase the supply of housing is delivered, property prices are unlikely to come down. Values are set to grow by up to 5% over the next 12 months, according to Halifax, and 3% according to the Royal Institute of Chartered Surveyors.
But while the stamp duty changes announced back in December's Autumn Statement is likely to create more mobility in the market, finding a suitable property to buy is likely to be a problem.
The lack of property in London poses a risk to the city's advantage over its global rivals. When you can't retain skilled people you cannot keep the mix of abilities needed to make the city prosper. This is why it's so important for these new schemes to flourish.
Image credit: propertydivision.co.uk