There has been a sceptical response by agents and others in the property industry to the government’s latest headline-grabbing tweaks to the housing market.
As Estate Agent Today reported yesterday, a surprise announcement from the Ministry of Housing Communities and Local Government revealed that a plan was afoot to give ‘local first time buyers’ up to a 20 per cent discount on new homes, to be paid for by developers. Few details were made available as to timescale or a definition of what constituted ‘local’.
In addition, MHCLG said it would create a new shared ownership model which would allow people to buy in one per cent chunks instead of at least 10 per cent.
On top of that, Help To Buy would be tweaked to allow buyers to have 35 year mortgages.
However, there has been little by way of support from experts.
“The changes to shared ownership are novel but as we’ve seen before through the likes of Help to Buy, an idea that will further fuel demand rather than address any real supply imbalance. While helping those in shared ownership, the 200,000 homeowners in this position account for less than one per cent of UK properties” says the director of London agency Benham and Reeves, Marc von Grundherr.
He dismisses the idea as “rhetoric.”
And Mark Hayward, chief executive of the National Association of Estate Agents says: “Government must be careful of the unintended consequences that any changes to Help to Buy could have on the rest of the market as in many cases these are not properties that feed into the general market place but into a ‘cul de sac’ with no assistance to upward activity”.
Meanwhile RICS policy manager Tamara Hooper says: “Changes to shared ownership may make a difference to some, but it is a complex legal process and the purchase of one per cent may be more complicated and ultimately more expensive than if the 1% had not been brought, we look forward to government releasing more detail about how this announcement will work in reality. We need to build more high-quality affordable homes, where they are needed, in the tenure they are needed, with schools, hospitals and transport links. RICS professionals across the country will help in every way they can to deliver the homes and communities we need to the highest standard.”
Even the campaigning charity Shelter - often a critic of agents and usually supporting government plans to increase home ownership - tweeted: “The government must realise that unworkable shared ownership schemes, laden down with admin costs, are the wrong priority at any time, and are woefully inadequate in the middle of the current housing emergency.”
Shadow housing minister Sarah Jones said: “Tinkering with the details of shared ownership is meaningless when lack of investment from government means low-cost homes for ownership simply aren’t being built.”
Here are the outlines of the government plans.