The question of whether we will
be living under a red or blue, or a mixture of both, Government will soon be
known. How this will affect the new
build market is also unknown and has created some uncertainty.
So what is likely to happen going
forward, depending of course, on who lands up as the governing force.
The Conservative Party has
committed to build 200,000 starter homes (built for first time buyers aged
under 40 with a 20% discount) and 275,000 affordable homes by 2020. Relatively small numbers and it is no clear
whether the latter is in addition to the 200,000 starter homes. The Labour Party is also looking to build a similar
number of starter homes by 2020 and has committed to the establishment of a
Future Homes Fund for investment in increasing housing supply.
It has similarities with the
Liberal Democrats idea of a Government backed Housing Investment Bank to provide
long term capital for major new settlements and to help attract finance. The
new home start figure for the Liberal Democrats is set higher at 300,000 each
year. They also commit to set in motion at least ten new Garden Cities.
Looking to make it easier for
those looking for a home in the area in which they live is high on the priority
list for Labour and they have promised to give priority to local first-time
buyers in new housing areas.
In an effort to encourage owners
of empty properties to sell Labour will be looking to allow local authorities to
charge higher council tax on empty house.
The Conservatives have outlined plans to unlock and allow development on
certain brownfield sites to enable 400,000 new homes to be built. Again it’s
unclear whether this is an addition to the 200,000 new starter homes and
275,000 affordable homes.
This is all well and good and
shows a broad acceptance across the parties of the need to build more new
houses and to make these affordable to those looking to get on the property
ladder. The numbers proposed are however
relatively small and do not meet ( apart from the Liberal Democrats) the
250,000 new homes each year that some commentators consider to the correct
number to keep up with demand. The truth
is that we have never come close to this figure and as long as we fall behind
with development economic recovery will remain volatile, rents will continue to
rise and the cost of buying a property and keeping hold of it will remain an
issue for many. People on ordinary incomes should be able to buy or rent a high
quality home at a price they can afford today, and have confidence they will be
able to afford tomorrow.
The major problem which none of
the main political parties have so far fully addressed is the lack of
competition in the new build market. By
2012 70% of new homes were built by large house building concerns. This is not surprising when land is so
expensive and only the larger developers can afford to purchase. The issue is that they all approach development
in the same way, that is to minimise build cost and maximise sale prices by
releasing homes slowly. If there is a
downturn in the market they reduce output and this contributes to a deepening
of the problem. So what happens is that
output only increases when there is an acceptable level of house price inflation.
MJP Conveyancers are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk
