Homebuilding manna from heaven or a mixed blessing?

Government housing policy is a bit like waiting for a bus – you wait for ages for one to come along and then two arrive at the same time (three if you count the National Planning Policy Framework). Localism recently became an Act followed by the Prime Minister and Deputy Prime Minister launching the ‘Laying the Foundations: A Housing Strategy for England’ document.

I bet the housebuilding industry is currently suffering severe indigestion trying to digest the implications of both initiatives.

Localism will provide both opportunities and challenges to an industry who at worst just buys land, builds on it, sells the homes and moves on without any direct contact with the local community, other than pushing through planning, to those who put some information boards up in a hall and hope that counts as community engagement.

Barely a week after the arrival of Localism the Prime Minster rolls up and launches his ‘getting Britain building’ initiative, which includes a new build mortgage indemnity scheme as well as funding to free blocked building and infrastructure projects, the opportunity for homebuilders to buy public land and the promise of future housing growth initiatives.

In essence the core of the scheme will ensure lenders are more confident of offering 95% mortgages.

For an industry, which, quite rightly, has been bemoaning the lack of mortgages and high deposits, this must have appeared to be manna from heaven.

And in the words of Homebuilders Federation executive chairman, Stewart Baseley: ” This scheme will allow people to buy their new home on realistic terms and help in particular hard-pressed first-time buyers. It will also be a huge boost to housebuilding.”

But will it boost the wider housing sector?

Unfortunantly this scheme does not encourage the creation of moving chains, which is something really needed to help owners of larger family sized homes sell their properties.

First-time buyers need to buy homes from existing homeowners to bump start the housing sector and create the confidence needed by the economy.

The scheme is part funded by housebuilders so they will not want to encourage folk to buy second hand properties.

Perhaps the government should have added an addition funding arrangement, aimed at the second hand housing market, to their very impressive list of ‘get Britain building’ initiatives to help get Britain moving?

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