Housing features heavily in Spending Review
Week in Westminster
Published: 27 November 2015 | Author: Michelle Vosper
Housing was one of George Osborne’s big-ticket announcements from the Spending Review and Autumn Statement. The chancellor will double the housing budget from 2018-19, and he set out a five point plan for housing, including delivery of 400,000 housing starts by 2020-21 focussed on low cost home ownership.
Key announcements included:
- The Help to Buy: equity loan scheme will be extended to 2021, and a new London Help-to-Buy will become available from early 2016 which will allow new buyers in Greater London to get an equity loan of 40%.
- A new Help to Buy: shared ownership scheme will be introduced for all households earning less than £80,000 outside London and £90,000 in London.
- The extension of Right to Buy for housing association tenants will be piloted by five housing associations to help inform the delivery of the scheme.
- Purchases of buy-to-let properties and second homes will be subject to an additional 3% on the current Stamp Duty rates from 1 April 2016.
A run down of all of the relevant announcements are on our website.
The Housing and Planning Bill committee considered the clauses relating to self build and custom build this week. The availability of mortgage finance was touched upon during the debate. Labour MP Matthew Pennycook highlighted the need to get more lenders to participate in this market and called on the government to continue to explore what can be done to reduce the constraints that face those interested in securing finance for this type of home. Gareth Thomas MP noted that the Treasury’s proposed capital levy on building societies may make it harder for societies to offer finance for this sector.
The Treasury select committee took evidence from Bank of England executives on the November Inflation Report. Committee member Mark Garnier raised what he referred to as his “pet subject” of household debt and household resilience. Mr Garnier has concerns that household will become increasingly vulnerable because of the level of debt they have to take on as a result of property price rises. Responding Mark Carney said: “Without question, more indebted households are more vulnerable. While the level of household debt has fallen notably over the course of the last five years, it is still at very elevated levels. We do not necessarily see it reducing further. In fact…we can see it upticking—largely due to dynamics in the housing market. You are absolutely right: the pressure on households because of debt burden is significant.”
The Welsh government launched its new registration and licensing scheme for landlords and agents. All private landlords will be required to register with Rent Smart Wales, along with their properties, while all managing agents will need to be licenced. Landlords and agents have a year to comply.