Prospects for Housebuilding

The new Labour government set out a number of initial plans for both the Housing and Mortgage sector. And with a large parliamentary majority, they may feel they also have the ability to swiftly push through changes, with some of what’s below flagged in the King’s Speech.

The government’s plans for the housing and mortgage sector focused on some key areas:
– Increasing the housing supply.
– Making homes more affordable.
– Supporting First-Time Buyers.
– Assisting those who are renting.

Housing Supply and Affordability

Build 300,000 Homes a year: This amount was last hit back in the late 1970s. And to help them achieve this objective the government intends to apply compulsory housebuilding targets over the next five years, with a strong focus on social and affordable housing.

Planning Reforms: It also intends to reform the planning system to expedite the approval and construction of new homes.

New Towns and Urban Development: The government wants to create a generation of new towns with comprehensive infrastructure to support families and communities, including reliable transport links and green spaces.

They would prioritise building on brownfield sites. This encompasses previously developed land, which is, or was, occupied by a permanent structure. Additionally, they would look at the greenbelt, but focus more on what they see as the greybelt element, which relates to poor-quality and ugly areas of the greenbelt.

Support for First-Time Buyers

Freedom to Buy scheme: Labour set out in its manifesto that it will introduce a permanent mortgage guarantee scheme called Freedom to Buy, designed to help First-Time Buyers secure mortgages without large deposits. This scheme aims to assist 80,000 young people in getting on the property ladder over the next five years.

Prioritise those living in the area
First Dibs for Locals: New housing developments will prioritise local residents.

Renters’ Reform Bill

Abolishing No-Fault Evictions: The government plans to abolish Section 21 no-fault evictions, thereby providing greater security for renters.

And, amongst a number of initiatives, they also intend to give tenants the power to challenge rent increases.

Initial TAX situation…

No immediate changes are planned for PAYE Income Tax, and the thresholds simply continue to be frozen until 2028. That’s why this is viewed as a stealth tax, as over time it draws more into paying tax, or paying more tax.

To deliver their policies, the government may need to either borrow more, or consider other tax options.

Some commentators feel that areas that may be looked at encompasses IHT, ISA allowances, pension tax-free lump sums, VAT changes on private school fees, and capital gains tax. Time will tell on the direction the government takes.

The Financial Conduct Authority does not regulate taxation advice.

Your home may be repossessed if you do not keep up repayments on your mortgage.