New Government Initiative to Kick Start the Market
Plans to allow first-time buyers of new homes to borrow up to 95% of their value, with the government underwriting part of the risk, have been unveiled. They are part of a scheme to deal with an acute shortage of affordable homes and people unable to get mortgages. It includes a £400m fund, which aims to kick-start schemes in England, which are ready but lack necessary finance.
Ministers said the plans would “unstick” the market but Labour said they were “rather small beer”. Building more homes has been earmarked as one of the government’s economic priorities. The number of new homes being built is at the lowest level since World War II, rents and prices remain high and mortgage lending is restricted. Just 121,200 new homes were built in 2010-11, 6% fewer than the previous year.
KEY PROPOSALS
• Mortgages of up to 95% of the value of new homes to be offered with government underwriting part of the risk
• £400m public fund to help developers “unblock” stalled housing schemes
• Larger discounts for social tenants wanting to own their properties under right to buy
• More public sector land to be made available for building
• Planning obligations on stalled projects reviewed
• Up to £150m to help bring empty housing back into use
Although the decline was not as sharp as in the previous year when the number of new builds and conversions fell by 23%, Labour say the government has failed to get a grip on the problem in its first year in power, and the situation has got worse in some parts of the country.
In an attempt to stop this decline, ministers are to intervene to support “shovel-ready” building projects that have been delayed by funding problems. A “Get Britain Building Fund” will see developers compete for funding to take forward projects, which meet the right criteria, among them, a commitment to affordable homes.
This initiative will begin in July and aims to facilitate 16,000 new homes and up to 32,000 jobs. It is hoped that about 450,000 mainly affordable homes will be built by 2015, many of them on publicly-owned brown field sites, although the government is not setting any specific targets.
This will no doubt strengthen the case for the proposed development at the top of the town in Dartmouth. I can understand the government’s thinking, creating jobs and giving developers the confidence to start developments, but how it forces up the market generally is difficult to see. The scheme seems to be for new homes only with no onward chain. If they made it for first time buyers generally rather than new homes only then I see it really helping.
First Published By December 2011 By The Dart
Richard Blake 01803 832288 www.richard-blake.co.uk/
