The rules surrounding the shared ownership section of the scheme have been relaxed to allow more people to benefit. The properties will be available to households earning less than £80,000 outside London and £90,000 inside the capital.
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The Government will provide 40 per cent of the price, or £140,000.
The chancellor’s measures promise to be the biggest affordable housebuilding programme since the 1970s, with more than 400,000 new homes set to be built across England. “People who are buying a house to let should not be squeezing out people who are trying to buy a home for their families”.
Plans to build hundreds of thousands of new homes in Britain could be scuppered by a shortage of skilled workers, industry experts warned last night.
George Osborne told MPs that the additional stamp duty, to be introduced next April, would raise nearly £1bn by 2021 – with some of that cash going to help people priced out of home ownership. “For those who can not or are not willing to buy a home, the Chancellor may actually be making the housing crisis worse”.
Osborne has changed the Help to Buy scheme as only 3,128 Londoners have used it to get onto the housing ladder – a rate of less than 30 sales per week – since the scheme launched in April 2013.
Buy-to-let landlords and second-home buyers face a big jump in stamp duty under plans created to ease the path to home ownership for first-time buyers. He said his plan “addresses the fact that more and more homes are being bought as buy-to-lets or second homes”.
Paul Smith, chief executive of Haart estate agents, said: ‘While many first-time buyers will applaud this initiative to discount starter homes, I fear these properties will still remain largely unaffordable to many, especially in London where the average price of a property is now in excess of £500,000.
Many experts have predicted that a lack of supply of homes will continue to put an upward pressure on house prices.
The independent budget watchdog, the Office of Budget Responsibility, says the tax increase should reduce the number of house purchases from 2018.
He said: “Today’s announcement isn’t the silver bullet that will solve the housing crisis as the Government will need to further reform the planning system to ensure enough land is released for development”.
“Government will need to keep a careful eye on the cumulative effects; with the private rented sector housing around a fifth of the population, we do need to avoid unintended consequences”, said Smee.
Owners of second homes must also pay capital gains tax on the sale of their properties, of between 18 per cent and 28 per cent. He also noted shares in housebuilders had pulled back from the high seen pre-statement earlier in the day.
London will receive £11 billion of investment in transport infrastructure while the government also pledged a £300 million commitment to cycling.
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George Osborne announced a pilot programme of five housing associations who would be testing his
scheme from this morning – including Saffron Housing Trust, based in Long Stratton. Once the deposit has been saved, the tenant will have “first right” to buy the home.
