The government is considering boosts to help first-time buyers in next month’s Autumn Statement – but experts are skeptical over how effective they will be
So what is the answer to this growing crisis? We hear a lot about what the problems are, but what are the solutions? The Conservative government has not achieved this target, managing to build just over 210,000 news homes in the year up to March. Ian Mulheirn, former Treasury economist and now chief economist at the Tony Blair Institute, calculated in 2018 that were we to build 300,000 homes for the next 20 years, compared with the lower numbers we’ve been achieving in recent years, then house prices will be 6 per cent lower in real terms.
The other big issue is funding of planning departments. Anna Clarke, director of policy and public affairs at The Housing Forum – a membership network for the housing sector – says only one in 10 local planning departments are fully staffed and this means a lack of staff to approve applications – particularly as new building safety and environmental protection regulations mean the demands on them are greater than ever before.
The tax is charged when you buy a property over a certain price – currently £250,000 – but reduced rates were introduced in 2020 to get transactions up again in the wake of the Covid pandemic. Before this, in 2017, the duty was abolished for first-time buyers for purchases of up to £300,000. “That would create demand for smaller flats by incentivising older families who no longer need their space to move,” he says. “It would also not be of huge cost to the exchequer as the people then moving into these larger homes would pay the tax.”
For those hoping to buy, this means far less ability to save money for a deposit – and for those who aren’t, it still means less disposable income. The government recently scrapped plans to force landlords with energy-inefficient homes to upgrade the, but Mr Rolande said a carrot, in the form of a tax incentive, rather than a stick, could be a solution.