George Osborne unveils the biggest affordable housebuilding programme in 30 years.
Good news for the housing industry as Osborne announces investment of almost £7bn in housebuilding and is set to deliver 400,000 ‘affordable homes’ in England to put the crisis of home ownership as priority although he plans to cut £20bn from spending and £12bn from welfare.
What does this mean for Britain's Builders?
The chancellor has revealed the following spending;
- £4bn for housing associations, local authority and the private sector towards building 135,000 Help to Buy Shared Ownership homes by 2021. They will be for households earning less than £80,000 (£90,000 in London).
- £2.3bn which will be paid directly to developers building “starter homes” for first-time buyers who will also benefit from a 20% discount for houses up to £250,000 (up to £450,000 in London)
- £200m for 10,000 new homes that will allow tenants to receive reduced rents of around 20% lower than the market for 5 years. This is to allow the tenants to save for a deposit so that they can then have first right to purchase the property when they are sold after the 5 years.
- £400m for housing associations and the private sector towards 8,000 homes that will be built especially for the elderly and people with disabilities.
Osborne has also revealed a dedicated Help to Buy Scheme in London. Currently, a buyer only needs a 5% deposit and the Government will give a 20% loan, based on the property's value, so buyers only need a 75% loan-to-value mortgage. Whereas the new scheme will mean the buyer will only need a 55% loan-to-value mortgage as the Government will give a 40% loan. more details to follow in 2016.
On top of this, an extra 3% stamp duty is being added to the purchase of additional properties such as buy-to-lets and second homes in an attempt to protect first time buyers in the housing market.