Latest report from Kate Faulkner: Housing and Planning Bill: Good, bad and ugly!
According to the government, the Housing & Planning Bill will “transform generation rent into generation buy”. Is there any truth to this claim? Well, I’ve taken a look at the impact this bill is really going to have – the good, bad and ugly bits!
So you can pretty quickly work out this isn’t something that intends to help tenants at all and, as such, also doesn’t help buy-to-let investors. But developers and first-time buyers can look forward to a steady run over the next few years.
And although more new builds being planned will help boost agents’ business, the likely loss of buy-to-let business and the continued expectation of a lack of stock for buyers and rents means they will continue to take the brunt of the government’s and local authorities’ lack of ability to provide enough homes for population of the UK.
There has been much comment recently on the changes planned in this most recent Bill to hit the housing market, so I thought it worth summarising what’s actually proposed and how it will affect your circumstances.
So what is the Bill proposing and how will it affect:
Property investors (buy-to-let)
Summary of the Bill’s proposals:
New affordable Starter Homes
Potential buyers already have the ability to buy properties through:
Shared Ownership where you live in 100% of the property but buy a portion of the property (anything 25% upwards) and rent the rest (link to article/checklist)
The Help to Buy equity loan, which is where you can buy a new build with a 20% loan free for five years from the government. This is available to buyers subject to a price cap, not just first-time buyers (link to article/checklist)
The new Starter Homes scheme, outlined in the Bill, is just for first-time buyers and you have to be under 40 to be eligible.
The Bill places a new legal duty on councils to provide 200,000 Starter Homes at 20% off the market price; it’s expected these will be on brownfield development sites.
Good, bad or ugly idea?
The details have yet to be explained but, to some extent, it seems to be a bit of a ‘repeat’ of the Help to Buy scheme, just more restricted to first-time buyers. There are also the following conditions:
It’s for new builds up to the value of £250,000 outside of London and up to £450,000 in London.
You can’t sell or re-let for five years on the open market.
It’s a bit of a bizarre idea to me. It certainly doesn’t help those in London – people there need help with homes to buy under £250,000 and to rent under £1,000. This appear just to give a one-off discount to first-time buyers, so doesn’t help the long-term affordability issue at all.
The other effect it could have is to depress prices of existing properties or other new builds in areas where there isn’t a huge supply and demand deficit, so for those looking to sell near these sites it could have quite an ugly effect.
Strategically it seems a bit of bad, short-term idea. But if you are a first-time buyer, it could be considered a gift from the government, so if you are interested, it’s definitely worth signing up to the Starter Homes register to alert government and local authorities to what you want to buy and where.
Getting Local Plans in place by 2017
This is an excellent idea and it’s outrageous that there are local authorities who have not produced them. Basically they require councils to identify the supply and demand for housing in your area and where and what they intend to build.
Local Plans have to be produced and published in full consultation with you, so there isn’t a reason why you can’t influence what is built and where in your local community. If you do care about putting roofs over people’s heads, then get involved.
Excerpt of full article kindly shared by Kate Faulkner of propertychecklists. Read full article