Housing is an important issue, especially if this country is to beat recession and people are going to realise the dream of home ownership.
To see how important, here’s one scary statistic: last year, house building was at its lowest level in peace time since the 1920s – now that’s an awful lot of lost jobs and economic inactivity.
And why? Well blame the credit crunch and then the Euro crisis for a perfect triangular storm. The lenders won’t lend, the builders can’t build and the buyers can’t buy.
So the government has responded with a housing strategy designed to get things moving.
The headline grabber is the FirstBuy scheme, providing £400m for 10,500 first-time buyers to purchase a new build property with a 20 per cent equity loan. The scheme is backed by the taxpayer, but I think it’s good business in the long term. For many, this will be their only hope of getting on the housing ladder, so it’s hugely welcome news.
Public land is also being freed up for 100,000 new homes with a ‘build now, pay later’ model to help developers create up to 200,000 new jobs in tough economic times.
Funds will be made available to help towards getting 700,000 empty homes back in use.
The Newbuild Indemnity scheme is also a major aspect of the strategy with people able to secure mortgages of up to 95 per cent on all new houses and flats – again stimulating building and jobs.
But I do have concerns with it. If the valuation which determines the mortgage is decided by the house builder, I fear they may add 3.5 per cent to cover the costs of paying the indemnity fund. The result is an increase in house prices, defeating an over-arching aim. I will be raising this concern with the government.
I’m also aware that there are environmental concerns. The government is committed to zero carbon homes by 2016.