Wednesday, 27 May 2015

Queen’s Speech to include Right to Buy extension

Today’s Queen’s Speech is expected to include more details about an extension of the Right to Buy scheme, which was part of the Conservative Party manifesto.
The new Housing Bill, to be announced by the Queen today will touch on all promises made by the Tories in  the run-up to the election.
*It will include legislation to extend Right to Buy to 1.3 million housing association tenants
  • This will include “significant discounts” to the market price
  • Receipts from selling an owner’s current property are pledged for building replacement affordable homes on a one-for-one basis.
*The bill will feature a new Right to Build policy, aimed at increasing housebuilding
  • This will be focussed on self-builders
  • Those eligible will have “the right” to be allocated land with planning permission
  • This will be in order for them to self-build or commission a local builder to build a home
*First-time buyers will be further helped by plans aimed at delivering 200,000 Starter Homes
  • These will be available at a 20% discount,
  • To first-time buyers under 40 years of age
  • Details on how and where they will be built not yet announced

Commenting on the Right to Buy proposal Richard Sexton, director of e.surv chartered surveyors, comment:
“The extension of Right to Buy to housing association tenants does help make an unfair system more balanced. However, there will be a time lag between selling off stock, and building new properties. In the meantime, the waiting list of tenants needing housing could get substantially longer. That will have a knock-on effect on the private rented sector and the purchase market.”
Sexton added: “It’s welcome to see the government acting quickly on their pre-election promises but minor tweaks to the system cannot possibly mop up all the buyers who want to get on the housing ladder today.
“Earmarking land to make it easier and quicker to self-build is a positive nod towards increased housebuilding, although the process remains far from simple. Planning regulations are still far too restrictive and the number of skilled workers who can physically put a house together is another anchor on new housing volumes.
*
Commenting on the upcoming speech David Whittaker, managing director of Mortgages for Business, said:
“One real danger from today’s announcements could be an eagle-eyed focus homeownership at the expense of other tenures.
“A homeowning society of ‘Grand Designs’ would be ideal – but in reality people often need homes they can afford near their place of work.  So the government must ensure that any pledge to replace housing association properties sold off through Right to Buy actually happens – and shouldn’t overlook the role of the burgeoning private rented sector.
“Equally, new homes are the solution to most of the UK’s property problems, but planning isn’t the only building bottleneck. Finance matters too – and has been in scarce supply for the best part of a decade. Specialist lenders with the know-how and the imagination to support property development schemes are making excellent returns and supporting vital new homes.  But they are the tiniest minority compared to the main bulk of the mortgage machine lending against the understandable safety of existing property.
“Confidence is the biggest factor holding back a tide of potential – and the government can’t magic up optimism overnight.  Even established developers need to feel particularly entrepreneurial to take on a decent-sized development project – and their financial backers will need at least as much convincing. The new government should be preparing for a long slog on the housing front. One Housing Bill won’t be enough.”

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