IMLA has set out a list of key priorities on which it wants the government to focus its spending, starting with a more ambitious commitment to housebuilding. The Conservatives recently pledged to build ‘at least 1 million’ homes over the next five years, with support measures included for first-time buyers and private renters. Just over 240,000 new homes were finished in 2018-19, according to data released in November last year, indicating that the one million target could be surpassed.
Other areas IMLA is urging the government to prioritise:
• Helping first-time buyers. Recent research from IMLA has suggested that the decline in homeownership amongst younger people is partially due to a combination of stringent affordability criteria and stress testing rules. This means that new buyers have to find large deposits – typically or20% - 25% - which remains beyond the reach of many, unless they are able to take advantage of schemes such as Help to Buy, or receive assistance from family and friends. More creative thinking is needed on how to stimulate schemes which enable first-time buyers to save for these large deposits or buy with the assistance of additional loans – such as those available under the Help to Buy scheme.
• The future of Help to Buy. The Help to Buy scheme has helped tens of thousands of new buyers onto the property ladder, but its phase-out starts in 2021 and it’s not yet clear what will replace it. The Government has announced proposals for a First Homes scheme, which will rely heavily on local planning authorities and developers. Many questions remain about how it will be delivered in practice.
• Supporting the Private Rented Sector. Landlords are still adapting to the implementation of recent tax and regulatory changes including the reduction of tax relief. IMLA argues the private rented sector is a vital part of the housing market, supporting both public and private sector tenants, and that the government must avoid any further regulatory or tax changes that could push landlords to exit the market
• Supporting the public rented sector. More social housing needs to be built in order to ‘re-balance’ the housing market. This needs to be part of the overall vision to achieve a sensible, balanced approach to housebuilding that appropriate housing is available to everyone, whatever their financial circumstances.
• A review of the Stamp Duty tax take and its impact on property transactions. IMLA has also called for a review of stamp duty across the whole range of property values, arguing that a revamped structure could reduce current barriers to moving without significantly impacting tax revenues.
Kate Davies, Executive Director of IMLA said: “The new Government’s first Budget presents an opportunity to take a real stride forward in its commitment to fixing Britain’s housing market – which the Conservatives themselves described as ‘broken’ in their wide-ranging white paper (published in February 2017). It’s clear Boris Johnson is bringing a ‘big thinking’ approach to policymaking and major capital projects – from his thumbs-up for HS2 to rumours of a Boris Bridge – and we’re urging the Government to bring a similarly bold approach to housing.
“Getting the strategy right means committing to a long-term vision – and with its sizeable majority, the Government is well-placed to co-ordinate that vision across all departments. We don’t just need more homes – we need the right size and design of well-built, energy-efficient homes, which are properly serviced by a well-planned infrastructure including roads, schools, hospitals and public transport networks. The pledge to build 200,000 houses a year is welcome – but the fact that that target has already been met over the last 5 years indicates that the Government could be more ambitious. We need a thorough analysis of what the UK’s housing needs are going to be over the next 20-30 years – and real leadership to deliver that.”
