Yahoo Finance What could Prime Minister Boris Johnson’s housing plans mean for you?
Plans to turn homeownership into a reality for more people have been set out by Prime Minister Boris Johnson.
Here is a look at the Government’s housing plans:
– What is happening with the Right to Buy?
An extension of the Right to Buy scheme in England, which has made home ownership a reality for two million households since the 1980s, has been announced.
Extending the scheme could benefit up to 2.5 million tenants who would gain the Right to Buy. The Government says it will work closely with the housing association sector on the design of the scheme.
– How could this impact the supply of affordable homes?
The Government says it will commit to the building of replacement social homes for each one sold.
However, some groups have raised concerns that this may not happen in reality, based on past experiences.
The Local Government Association (LGA) says any houses sold must be replaced quickly, in the same local authority area and on a like-for-like basis.
– What else has been announced?
An independent review of access to mortgage finance for first-time buyers, will take place with the aim of widening access to low-cost, low-deposit finance such as 5% deposit mortgages.
According to the Government, over 50% of today’s renters could afford the monthly cost of a mortgage but various constraints mean only 6% could immediately access a typical first-time buyer mortgage.
As housing policy is devolved, some of the review’s recommendations will apply to the whole of the UK, while others may only apply to England.
– And what about plans to turn “benefits into bricks”?
Welfare rules will be changed under the plans, so that the 1.5 million people who are in work but also on housing benefit will be given the choice to use their benefit towards a mortgage, rather than it automatically going directly to private landlords and housing associations.
Currently, welfare rules taper the amount of Universal Credit received when the claimant’s savings exceed £6,000, and it stops entirely when savings exceed £16,000.
The Government plans to exempt Lifetime Isa savings from these rules – meaning people can save a little each month specifically for a deposit without it impacting their Universal Credit payments.
– How have the plans been received?
The reaction so far has been mixed. Some commentators have said the plans will need careful consideration.
Others suggest the plans will be be welcomed by those who can afford monthly payments, but who are currently locked out of homeownership.
Chris Pitt, CEO of first direct said: “Today’s announcement could help alleviate the first-time buyer freeze-out, and create a more level playing field for people across the UK looking to secure a home.”
But Polly Neate, chief executive of Shelter described the housing plans as a “dangerous gimmick”.
– What else do people think could be done to help the housing sector?
Some have called for further investment in affordable housing, including social-rented stock.
Holly Holder, deputy director for homes at the Centre for Ageing Better, said: “At the heart of the issue, there simply is not enough genuinely affordable housing, particularly for people with increased accessibility needs, many of whom are older.â¯What we really need is a housing stock mix that suits everyone’s needs.”
Karen Noye, mortgage expert at Quilter said: “Ultimately we just need to build new homes in areas that people actually want to live rather than soulless out of town developments.
“Doing this would be far more powerful than tinkering around with ways to help people finance their first home.”
