Tuesday, 21 October 2014

Firstbuy scheme a 'sticking plaster on a broken leg'

The government’s first time buyer’s package will do little to help those in housing need, warned Shelter.

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Responding to chancellor George Osborne’s budget yesterday, Campbell Robb, chief executive of the housing charity, said the policy was the ‘equivalent of a sticking plaster on a broken leg’.

‘Today’s announcement will help less than 1 per cent of those struggling to get on the housing ladder, leaving them more likely to win a prize on the lottery than be helped through this small-scale scheme,’ he said.

‘It’s a shame the chancellor wasn’t such a champion of housing investment six months ago when he slashed the budget by over 60 per cent.’

The Chartered Institute of Housing warned the £250 million firstbuy scheme should not just be a short term measure.

Chief executive Sarah Webb said: ‘The £250 million fund is a useful short term boost, but it is important that we also address the fundamental question of how to sustain housing supply in the long term. Measures to reform the planning system will have a more significant role in this.’

The National Housing Federation said the scheme would help first time buyers.

Chief executive David Orr said: ‘This scheme will offer first-time buyers on moderate incomes a much needed helping hand towards buying an affordable home and is a very welcome move.’

The NHF was also keen to look at how housing associations could make the best use of the £3 billion funding now allotted to the green investment bank, he added.

The Town and Country Planning Association was concerned about the government’s plans for land auctions, allowing councils to raise money from the increase in value of land with planning permission.

Kate Henderson, TCPA chief executive, said: ‘The pilot of land auctions raises some serious questions about the probity of planning decisions and risks undermining the government’s ambition to rebuild trust in the planning system.

‘We wait to see the details of these pilots but transparency of decision-making and ensuring development is in accordance with the principles of sustainable development will be pivotal.’

The National Landlords Association said changes to the stamp duty land tax would encourage private landlords to invest more in residential property. Mr Osborne pledged to change the rules for bulk purchases of residential properties so that a buyer could choose to pay stamp duty on the mean value of the homes purchased rather paying it on each home individually.

David Salusbury, chair of the NLA, said: ‘The stamp duty concessions on bulk purchases will encourage landlords to invest more in residential property, thus providing much needed housing in the private rented sector.’

The government will also extend the support for mortgage interest scheme, which helps struggling homeowners pay their mortgage interest payments, for another year. Unemployed home owners can claim up to 100 per cent of their interest payments after 13 weeks of unemployment and for mortgages worth up to £200,000. The scheme was due to end in January 2012.

Other comments on the yesterday’s Budget:

Richard Diment, director general of the Federation of Master Builders, said: ‘The chancellor missed an opportunity today to support the green deal and kick start consumer demand to make our homes greener. Without creating demand in the market for energy efficient improvement it is difficult to see how the green deal will succeed when it starts in the autumn of 2012.’

Stewart Baseley, Home Builders Federation executive chairman, said: ‘The severity of the housing crisis dictates that work doesn’t stop here. It is crucial that all [yesterday’s] announcements are built on, regulation is reduced, land supply increased and the planning system simplified.’

Paul King, chief executive of the UK Green Building Council, said: ‘In the space of two weeks, this government has gone from a firm commitment on zero carbon homes, to a watered down policy. A zero carbon home will no longer do what it says on the tin.’

Simon Rubinsohn, RICS chief economist, said: ‘RICS is concerned that the government has not thought through the effectiveness of land auctions and the level of impact they will actually have on the amount of development land being made available. It seems unlikely that landowners will be willing to sell if they think they can benefit from gaining planning permission, which could deliver far greater profits.’

Richard Summers, president of the Royal Town Planning Institute, said: ‘If sweeping changes announced to the planning system result in the default position being “yes” to development then there is real danger that within a decade we will end up with an England of tin sheds, Legoland housing and US style shopping malls.’

Ian Fletcher, director of policy at the British Property Federation, said: ‘This is impressive backing for a long-standing BPF campaign to have stamp duty on residential portfolio trades reformed. It will provide an important boost for the private rented sector and we hope will tip the balance in encouraging institutional funds into building homes.’

Readers' comments (3)

  • "David Salusbury, chair of the NLA, said: ‘The stamp duty concessions on bulk purchases will encourage landlords to invest more in residential property, thus providing much needed housing in the private rented sector.’"
    • Yet more proof if any were needed that the Tory/LibDem/Labour coalition is the private landlord's friend. This will simply lead to existing homes that developers can't sell, because bankers etc won't lend to people to buy their own homes, being bought by private landlords. This most parasitic of classes will be subsidized in their quest to get their grasping hands on money that should be buying for individual house holds a home they can call their own. Tax-me-not Osbourne could have introduced any number of schemes to help people save for deposits or, reversing a policy introduced by the WGLM (G. Brown) to deny individual occupiers the concession granted to landlords to off set their interest payments against tax.

    "The government will also extend the support for mortgage interest scheme, which helps struggling homeowners pay their mortgage interest payments, for another year".
    • The most iniquitous change, introduced in January 2009 by the WGLM (G. Brown) is the restriction to two years of this help being available to hard pressed home buyers. Will this time limit be lifted in January 2013 or will Tax-me-not Osbourne simply opt to revert to the 39 week waiting period and the £100,000 cap on mortgages that prevailed until Jan '09? No prizes for guessing the likely answer to that one. Interestingly, landlords are eligible, via their tenants, for endless LHA and HB because time limits are not placed on those benefits. Hardly fair and equitable.

    “The pilot of land auctions raises some serious questions about the probity of planning decisions and risks undermining the government’s ambition to rebuild trust in the planning system”.
    • Absolutely – and it will drive up the price of all land as landowners anticipate the increases in value that will arise when consents are given on land that under the previous system may not have had any chance of getting consent. Yet another example of Tax-me-not Osbourne looking after his own class.

    “Measures to reform the planning system will have a more significant role in [sustaining housing supply in the long term]”.
    • How exactly? If people can get the finance to buy, then developers may start building again. If they can’t, then homes won’t be built to stand empty awaiting buyers. Look at Ireland… Assuming that the economic situation changes for the better (unlikely), the question then arise as to what type of buildings and homes will be built and where they will be built? Developers have a short term interest – build, sell and take the money and run. Communities – and by extension planning systems and policies – have a many long term interests. The impact on economic, social and environmental sustainability, on services, the aesthetic of an area, the dynamic of a given locality. Planning may be flawed but it is better at protecting the interests of the majority than this profit-driven free-for-all that will rapidly evolve from the state abandoning its role as a guardian of the common interest. Again, the motive is nothing to do with helping people find a home but allowing some developers and land owners to make quicker, faster profits.

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  • Gavin Rider

    Shelter needs to keep to what it is supposed to be dealing with, which is alleviating homelessness, and keep its nose out of other politics.

    The FirstBuy scheme is not intended to address homelessness, it is intended to support those who are seeking to buy a first home - several strata above homelessness - so to describe the scheme as a sticking plaster on a broken leg is utter nonsense.

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  • Campbell Robb of Shelter had close active political links with the Labour Party (press officer/research officer) so that discounts his partiality.

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