A series of recent statements, including at the Conservative Party conference earlier this week, suggest that the Government’s focus is now on housing delivery generally and not just on home ownership. This includes the introduction of some specific measures aimed at supporting the private rented sector.
Under David Cameron's leadership, the Government introduced various measures designed to support young people and families struggling to own a home. Cameron announced he wished to change policy to “turn Generation Rent into Generation Buy” with strategies including the manifesto promise to create 200,000 “starter homes”.
However, in the last few weeks there appears to have been a shift in emphasis.
Help to Buy mortgage guarantee scheme to close
Last week the Chancellor, Philip Hammond, closed the Help to Buy mortgage guarantee scheme. The scheme, introduced by George Osborne in 2013, allowed buyers to borrow up to 95 per cent with a 5 per cent deposit with the Government guaranteeing a portion of the repayments. The aim was to encourage lenders to provide mortgage finance for first time buyers. Mr Hammond has said that the scheme's purpose has been “successfully achieved” and added that “it will close the new loans at the end of 2016”. The Help to Buy ISA and the equity loan scheme remain in place.
Home ownership but not at the expense of overall housing delivery
Speaking at the National Housing Federation and the Housing for Planning conferences in the previous two weeks, Gavin Barwell, the Minister for Housing, concentrated on the Government's affordable housing programme, the importance of the Shared Ownership and Rent to Buy schemes, estate regeneration and placing the onus on developers to build out permissions quickly. He indicated that the Government remains "committed to helping people onto the housing ladder, but not at the expense of reducing the number of homes our programme delivers".
Changes to starter homes to include rent to buy homes
There are also reports that the Government may change its starter homes policy to include rent to buy homes similar to the London Living Rent recently announced by the Greater London Authority. This would be a rent conversion model where part of a household's monthly rent would contribute towards a deposit on a house.
Housing White Paper announced at Conservative Party conference
At the Conservative Party conference on Monday Sajid Javid, the Secretary of State for Communities and Local Government, named housing as his “number one priority” and announced various steps to get more houses built.
This followed comments by Gavin Barwell the day before at a fringe event about the country needing more homes for private rent and more sub-market homes for rent as well as houses for sale.
Mr Javid made no specific mention of starter homes. Instead, he outlined series of measures to encourage urban regeneration in former shopping areas and building on abandoned brownfield land, as well as increasing housing density around stations.
A Home Builders Fund worth £3 billion is to be launched to support small and medium sized builders, custom-builders and to help fund the infrastructure required to support new housing. £2 billion of new investment will be directed towards Accelerated Construction on public land, a new initiative under which the Government will partner with contractors and investors.
Mr Javid promised a housing White Paper later this year detailing further measures designed to achieve the Government’s ambition of a million new homes by 2020.
We await further announcements and the White Paper with interest.