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Four new measures caught my eye in particular:
Firstly, the changes in local authority funding and especially the measure that will enable councils to retain 100% of the receipts from the sale of assets, will give a boost to our objective of significantly increasing the amount of work that we do in partnership with local authorities that is non-housing estate regeneration based. We’ve seen a marked increase in the last few months in the number of local authorities that are either bringing opportunities to the market or soft market testing potential opportunities.
Secondly, there is a continuing recognition that many Council estates require regeneration with the proposal that £2.3billion be allocated for this and other major housing projects. It is loan rather than grant funding, but cutbacks in local authority funding have meant that, in recent years, the up-front funding of land assembly and other costs, rather than overall viability, has become increasingly problematic. Loans will greatly help this.
Thirdly, it is very pleasing to see that the affordability problems in the London housing market have been recognised by a new Help to Buy London programme and to run this until 2021. Help to Buy has been a very important product for us both in the South and North since its launch in 2013 for two main reasons. In many ‘secondary’ markets in London and elsewhere potential homebuyers face real difficulties in raising significant deposits. The 20% government loan, now rising to 40% with Help to Buy London, has made home ownership possible for many people who would otherwise have been locked-out. Additionally, Help to Buy ensures that homes are sold to owner occupiers rather than Buy to Let investors and that is very important for many of our local authority partners.
Fourthly, the increase in Stamp Duty on homes bought by smaller investors for Buy to Let. This sector only accounts for around 15% of Countryside’s latest annual sales so in the context of all of the other housing and related announcements, it is not something which causes us undue concern. Indeed, it would appear that revenue from the stamp duty increase for investors will be funding the bulk of the Chancellor’s doubling of the affordable housing programme so in some ways it will be helpful.
There’s no doubt that, particularly in London and the South East, housing supply is resulting in very serious affordability issues for aspiring owner–occupiers and tenants alike. The Spending Review is therefore welcome, both for acknowledging the root cause - lack of supply and the need for measures to improve the affordability of the new homes that are being built.
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