Good news for all first time home buyers!
British Prime Minister David Cameron announced in a recent speech that he will be spearheading the overhaul of Whitehall and town hall planning rules!
So how does this affect you and your chances of owning your very own home? A lot.
Current laws restrict builders from building and offering low cost houses; but under his proposed changes, Prime Minister Cameron aims to speed up the process of releasing public lands for residential purposes and improve planning laws. These changes are earmarked to produce 200,000 starter homes by 2020 and they will be sold at a 20 per cent discount for first time home buyers under 40 years old.
Cameron hopes that his plan can help turn “generation rent” into “generation buy.”
There is still a question whether housing supply can meet demand.
So far, there has been positive feedback on the announcement, but many are saying that 200,000 start homes may not be enough for current demand.
Mark Hayward, managing director of the National Association of Estate Agents (NAEA), points out that sale of houses to first time home buyers are still continuing to drop, despite the existence of first time home buyer schemes such as the “Help to Buy.” And he claims that lack of infrastructure is the cause of this slowdown in sales.
Lawrence Hall of online property portal Zoopla seconds the call for the construction of more starter homes, since the UK’s demand for housing grows every year.
As a solution, Luke Jooste, head of real estate finance at Funding Circle, suggests that the government should fund more small time developers in order to meet the high demand for low cost housing.
Joote shared that large developers only meet 50 to 60 per cent of actual market demand, but small builders can’t fill up the gap because lenders refuse to lend them the money for startup capital.
British Property Federation (BPF) has urged the Government to focus on delivery of all housing tenures, not just houses for sale.
BPF argues that although renting has been seen negatively by many politicians, creating purpose built rental properties can help in increasing the number of dwelling available for occupation. Melanie Leech, chief executive of the British Property Federation mentioned as examples Germany and the United States as examples where rental markets thrive hand in hand with residential houses.
In my opinion, I believe that it’s about time that the government take positive steps to build low cost houses. They’ve already introduced financing programs to help first time buyers get enough deposit money, but its purpose may not be achieved if there are no houses to buy in the first place.
UK’s housing problems aren’t impossible to solve if responsible measures are taken to ensure the supply of houses meet ever growing demand.
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