Last week, the government released its highly anticipated Housing white paper titled “Fixing our Broken Housing Market”, leading with the announcement of the aim to help 200,000 people to become homeowners by 2020.
Fantastic news for buyers and vendors alike!
Although not to dissimilar from the Autumn Statement, there is an emphasis on relaxing building regulations and freeing up land to build thousands of new homes, setting ambitious house-building targets for councils and putting pressure on developers to starting building on unused land.
We’ve rounded up the key points which have emerged from the Housing white paper’s publication.
Help to Buy The good news continues for first-time buyers, as the government has confirmed that the Help to Buy Equity Loan will be in place until at least 2021, with plans for revisions to extend it further. With a Help to Buy Equity Loan, first-time buyers can receive a 20% loan (40% in London) from the government, meaning buyers can apply for smaller mortgage and can save a smaller deposit.
Lifetime ISA This scheme has been given the green-light, and will begin in April 2017. Savers aged 18-40 can open a Lifetime ISA (LISA) and save up to £4,000 year, receiving a 25% government bonus of up to £1,000 every year. Designed to help people save for their first home or retirement, savers will be able to draw their LISA early (before aged 60) if it’s used for the purchase of a first home worth under £450,000, without penalty. Starter Homes Initiative Originally launched in 2015, there will be some changes to the Starter Homes Initiative, which offers homes to first-time buyers under 40, at a minimum 20% reduced price. There will be an income cap, meaning only households with an income of less than £80,000 (£90,000 in London) will be eligible. Applicants must now have a mortgage, to eliminate cash-buyers from purchasing Starter Home properties.
Rent to Buy Funding will increase for homes built for Rent to Buy; a scheme which enables tenants to rent new-build homes for 20% under the market rate for up to five years, with the option to buy the property or part of the property, in accordance with Shared Ownership regulations.
Leasehold Properties With an increasing number of leasehold properties on the housing market, the government have announced that ‘urgent reform’ is required. Many buyers are unaware that leasehold homes can be more expensive in the long-term, due to increasing ground rents and on-selling of freeholds without their knowledge.
Custom-builds & self-builds Keen to promote self-builds, the government’s new Right to Build rules place responsibility for finding land for custom builds in the hands of local planning authorities. Measures also include keeping a register of those wanting to design their own home. What did you think of the white paper? Let us know by getting in touch via our social media. We are on: Facebook, Twitter, LinkedIn, & Pinterest.