Measures in the recent Budget that could result in many more new homes being built to help alleviate the housing crisis have been cautiously welcomed.
Chancellor of the Exchequer Philip Hammond announced last week that the Help to Buy scheme would extend until the end of 2023. Help to Buy currently offers a government-backed loan of 20% in addition to the 5% buyer’s deposit when buying a new-build home, and it was recently hailed as an “unmitigated success” since its launch in 2013 by the Home Builders Federation.
Mr Hammond also revealed that an extra £500m would go into the Housing Infrastructure Fund to help build an additional 650,000 new houses. And an additional £1bn has been allocated to support SME housebuilders.
Help to Buy extension hailed
“The extension of the Help to Buy Equity Loan scheme to 2023, announced in the Budget, will give developers the confidence to push on with new projects,” Patrick Gower of Knight Frank told Property Wire. He also found encouraging signs in the number of energy performance certificates for new houses being issued, which has risen by 2.3% over the year to the third quarter of 2018, to their highest levels in a decade.
The Chancellor also revealed that the government will consult on relaxing planning rules, allowing some of the 50,000 empty shops in the country’s towns and cities to be turned into residential homes.
The Federation of Master Builders had welcomed the plans, saying that between 300,000 and 400,000 new homes could be created if all empty space above high street shops was used.
“The government’s latest tack of introducing sensible policies that may make modest but positive changes should be commended,” Mr Gower added in Knight Frank’s assessment of the 2018 Budget.
Utilising high street properties
“Enabling developers to change empty shops into homes could also ease housing shortages a modest amount in areas with struggling high streets. Meanwhile, Homes England’s new five-year plan to use its land, money and influence to increase the pace and scale of housing delivery – particularly on the tricky sites that have fallen out of favour – could herald real results.”
The 2017 Budget unveiled plans to build 300,000 new homes a year until the mid-2020s. However, forecasts from the Office for Budget Responsibility say that the net amount of new homes will hit 246,000 in 2019 and remain at that level.
Help to Buy has increased the amount of new homes being built, as Peter Gower adds, “…through Help to Buy alone, hitting the 300,000 target by the middle of the next decades looks increasingly unlikely.”