This week’s guest column comes from chartered commercial surveyor and registered valuer James Fairman. He looks at what he believes is positive news for the housing market...
George Osborne’s fourth budget has announced various measures to improve the state of the housing market by trying to increase the stimulus for building.
A number of schemes have been announced, which are summarised below.
The headline scheme was the Help to Buy scheme comprising an equity loan and a mortgage guarantee from the Government. This applies to all buyers with at least a five per cent deposit valued on homes up to £600,000. Mr Osborne has pledged £3.5bn to provide loans of up to 20 per cent for that buyer which, in effect, is an extension of the existing First Buy scheme. This will be used for new build purchases only and was available from April 1 for three years. It is hoped this will generate an additional 74,000 more homebuyers.
The Government is also making up to £12bn of guarantees to support £130bn worth of mortgages for new build and existing properties available from January 2014 for a period of three years.
Landlords looking to become developers to build new properties for the rental market will benefit by the Build to Rent fund being increased from the existing £200m to over £1bn.
The new fund has been provided to the tune of £225m to boost support for a further 15,000 affordable homes, available until 2015.
Finally, some social housing tenants will benefit from an increased discount under the existing right to buy policy.
Of course, all these measures will only become attractive if the lenders offer acceptable rates to buyers benefiting from this scheme, which remains to be seen.
Mr Fairman is based at Fydell House in Boston and can be contacted via email on firstname.lastname@example.org. He specialises in sales, building surveying, investment acquisition, valuation, rating and development.