New Homes and Equity loans: a drop in the ocean
The HomeOwners Alliance welcomes the Budget 2013’s emphasis on housing and supports the extension of Right to Buy. The new shared equity scheme, Help to Buy, could be an important boost for aspiring buyers. However, the action announced is a drop in the ocean and will do little to tackle the shortage of homes in the UK.
March 20, 2013 | post last updated on November 21st, 2017
Budget announcements will help people but will they really tackle the housing crisis we have got ourselves into?
If you’re living in social housing in London and in a position to buy, then the extension of the Right-to-buy discount announced today could make owning your own home possible. We welcome this move as long as the Government uses the revenue raised to fill the housing gap.
Help to Buy is an extension of an existing scheme whereby an equity loan from the Government of up to 20% enables people with a 5% deposit to get on the property ladder. Help to Buy will open out this equity loan to all people wanting to buy a new home, not just first time buyers, and comes with no limit on household income.
Paula Higgins, Chief Executive of the HomeOwners Alliance, said: “Help to Buy as practical help for homebuyers but warns that it isn’t risk free: new homes fall in value as soon as the key is turned in the door, trapping buyers in negative equity.
The new mortgage guarantee looks positive in principle but the Government has dodged any measures that would make a real difference to the affordability of owning a home, preferring instead to fiddle around the edges, helping people manage their escalating debt rather than taking away some of the crippling unfair costs such as stamp duty.”
Today’s Budget announcements will do little to address the fact that we have not been building enough homes for 30 years.
Ms Higgins continued: “While the equity loan scheme announced today will get some houses built, it won’t be enough. The Government should have considered a targeted Help to Build scheme, getting more houses in the right places and at the right price available on the open market, if they want to make a dent on the decades of chronic lack of house building.”
Successive governments have consistently announced policies aimed at kick-starting developments but construction of new homes is at a record low. Just 98,000 housing “starts” were recorded last year down 11% and well short of the 230,000 new households which were formed.
The dream of home ownership is dying in this country. Home ownership has fallen to the lowest level in 25 years and set to tumble further. There are far too many examples of hard working people saving for years and failing to get a deposit on even a modest property. We call on the government to ensure enough homes are built and fix our broken housing system.
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For media enquiries contact Paula Higgins on 020 3397 3292, or 07947 240 293, firstname.lastname@example.org
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About the HomeOwners Alliance
The HomeOwners Alliance champions the interests of Britain’s homeowners and aspiring homeowners, and provides services they can trust. We are a membership organisation, acting as the voice of the homeowner in the media, lobbying for the interests of homeowners and aspiring homeowners in government, and campaigning against bad practices in industry.
HomeOwners Alliance Report, Death of a Dream – The Crisis of Homeonwnership, published on 16th November 2012, found that the dream of homeownership is dying in Britain, and that the consequences are profound and long lasting: poverty among pensioner and children will rise, social inequality worsen, with more and more people face life in insecure rented accommodation.
We will directly engage with government and the media by conducting independent research and publishing reports that promote and champion the interests of homeowners. Former Housing Minister, Grant Shapps, called the HomeOwners Alliance “good news for homeowners and homeownership”.
At hoa.org.uk, we provide independent advice for the key moments in owning a home, supported by legal and industry experts. We are modelled on successful similar organisations on mainland Europe, notably in the Netherlands, Sweden and Norway.