Overall there wasn’t a big housing announcement as to how the government plans on solving the crippling issue of supply or the increasing house prices that are preventing many young people in the country own a home.
ISAs have been a popular tool in the government’s effort to show that its commitment to helping young people get on the property ladder. At this year’s budget it announce a ‘Lifetime ISA’ which would provide people under the age of 40 with 25% on top of any funds in the account (up to £1,000 per year).
Looking at the bonus against the rate of house price increases takes the shine off the ISA slightly. A saver could have achieved a maximum bonus of £5,000 by 2021 from the government however house prices are expected to raise by 25% by 2021, meaning that the average house would go up by £50,000.
The government has hit the private rental sector hard over the past couple of years and it confirmed that it would increase stamp duty by 3%, which in turn would increase rent fees and therefore eat into any money that tenants could save for a mortgage deposit.
“By hitting the rental sector with higher taxes and lower reliefs, the Chancellor is making renting more expensive and getting on the ladder even harder for Generation Rent.”
As a property developer, Richard Carr has first-hand experience of the current problems within the country’s planning system. Local planning authorities have suffered from funding cuts which has meant that departments are under resourced and staffed.
This year’s budget saw the government set out a new kind of system, modelled on the American zoning system. Richard Carr is unsure if it will speed up the process or just complicate it further, Duncan Field, Head of Planning at law firm Norton Rose was also on the fence:
“It is significant that the housing and planning bill has the idea of permission in principle, which is borrowed from the US’s zoning rules.
“Local authorities will identify areas on the edge of cities where extension is feasible, build it into their local plan, and that will establish permission in principle, and so house builders will only have to get technical details approved. So it potentially speeds up planning.”
In conclusion, the government hasn’t done anything drastic and although on the surface some of the changes may appear as positives, when you dig a little the faults reveal themselves.
Richard Carr is a keen to see how the new planning system will work when it’s implemented and believes speeding up the process and ‘permissions in principle ‘will hit a brick wall as lenders will want detailed Planning, the saving grace is it may speed up the whole process.