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WhatHouse? readers call for new affordable homes to be for sale, not rent

Posted 14 December 2016 by Ben Salisbury

The overwhelming response from the latest WhatHouse? survey is that the affordable homes announced in the Autumn statement should be for sale not rent

The Autumn Statement and its impact on housebuilding has been the topic of the latest WhatHouse? survey.

We asked if the £3.7bn investment announced in the Autumn Statement should be for affordable homes that are for sale or for rent. £2.3bn of this forms the Housing Infrastructure Fund and £1.4bn is to deliver 40,000 affordable new homes by 2020/21.

The verdict

WhatHouse? readers voted 77% to 23% for the new affordable homes to be for sale rather than for rent.

Why do readers want homes for sale rather than rent?

People still want to own their own home, ideally the whole of the property. Though this is increasingly difficult for most first-time buyers in London and the south of England, most people still want the money they spend on property to provide an eventual return rather than it all be wasted on rent, even if it means buying through shared ownership or another scheme to get on the housing ladder in some way.

With high prices and a shortage of supply big issues, there needs to be some affordable homes built for rent, but as most people want to invest in their property rather than pay rent, the Autumn Statement should have provided even more support for shared ownership, Right to Buy and Help to Buy.

Other options

Shared Ownership helps people on modest incomes get onto the property ladder. It offers the option of buying a share in a property, often with just a 10% deposit. So, if you are buying a 25% share of a property that costs £400,000, your deposit would be based on your share, i.e £100,000, so a 10% deposit would be £10,000. Staircasing allows you to put down more money to buy more of the home as you can afford to.

Help to Buy

The government reaffirmed its support for homebuyers in the Autumn Statement for the Help to Buy loan scheme and Help to Buy ISA, though the mortgage guarantee scheme will close at the end of 2016.

With a Help to Buy equity loan the government lends the buyer up to 20% of the cost of the property, so only a 5% cash deposit is required alongside a 75% mortgage. Buyers aren’t charged fees on the 20% loan for the first five years of ownership.

Right to Buy

This scheme gives secure tenants of councils and some housing associations the right to buy, at a large discount, the property that they are living in.

The Chancellor, Philip Hammond announced a large scale regional pilot of Right to Buy for housing association tenants.

Twitter reaction

 

New homes detail

How will the funding for affordable homes translate into new homes, will you be able to buy them and what are the potential pitfalls in delivering them?

The housebuying public want to see new affordable homes for sale built as soon as possible, but it is likely to take 18-24 months for the new homes to be completed even without any issues that could slow the process down such as planning permission or the construction skills shortage.

Even with new investment, the new homes target of 250,000 a year and one million by 2020 won’t be reached. The new homes tenure mix is key, but even shared ownership costs in London are beyond many.

But what is clear from our survey is that WhatHouse? readers want to own the home they live in and the affordable homes measures announced in the Autumn Statement should include homes that are for sale.

This makes the forthcoming White Paper on the housing sector promised by the government in January 2017 even more important.

The industry and public want to see well-thought out measures to improve the rate of housebuilding, tackle landbanking, develop  the Starter Homes Initiative  and provide a mix of tenures and ownership opportunities to give more people the chance to realise their dream of owning the home in which they live.

The White Paper could look again at Stamp Duty, not mentioned in the Autumn Statement, but a subject that WhatHouse? readers had a clear view on, that it should be cut for first-time buyers, in our last survey conducted in the run up to the Autumn Statement.

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