Housing White Paper: “What do they mean by affordable?”
Arguably at the centre of the housing crisis, the level of housing supply has struggled to meet the demand of first-time buyers.
Released on Tuesday (07/02/17), the government’s Housing White Paper set out the long- term plan to fix the UK’s “broken housing market”, including proposals to grow supply by providing more affordable homes.
Although the promised growth of new builds has been welcomed, among industry commenters there has also been an undertone of doubt. The need for clarity is a recurring theme, particularly in regards to the true meaning of new home affordability and the actual suitability of the homes for buyers.
Doug Crawford, CEO of My Home Move stated: “The publication of this White Paper has been long awaited, and while we welcome the Government’s renewed pledge towards fixing Britain’s ‘broken housing market’ the ultimate issue still remains – what do they mean by ‘affordable’?
“From our own research, we know that homebuyers view affordable as a home that costs in the region of £125,000 to buy outright; meaning despite the popularity of shared ownership schemes (only 1 in 5 shared ownership properties are bought by first-time buyers) people do not really count these transactions as affordable housing.
“And while we welcome the Paper’s focus on building the millions of properties needed, there is still a lack of detail of whether these will be priced sensibly for all generations. We know that would-be downsizers have already told us that they feel unable to move due to a lack of suitable, right-sized, right-priced homes – highlighting the fact that any government measures need to give consideration to all home buyers and movers.
“However, we are delighted that the Government has committed to leasehold reforms via consultation. It is no secret that leasehold purchases are often more complicated, time-consuming and incur greater stress for the homebuyer, compared to buying a freehold property, and so any move which protects the consumer, is welcomed.”
Managing Director of Post Office Money, Owen Woodley also shared his opinion, stating: “Post Office research shows that, at present, more than eight million UK renters expect to never own their own home. More new build properties are vital to meet the demands of an increasingly competitive housing market and we welcome today’s call for councils to build thousands more homes across the country. We look forward to seeing how this scheme is implemented and welcome further clarity on how these will be financed.
“But to really get the market moving, these properties must be suitable for the nation’s first-time buyers (FTBs) – meeting the practical needs of the average FTB, at a price that is realistically affordable for them. While some may be happy to continue renting indefinitely, last year over a third of all mortgage applications to Post Office Money were from first time buyers, demonstrating that home ownership remains an important aspiration for many. Owning a home provides financial security and we can’t deny the current generation the opportunity to build towards their own futures.
“Mortgage providers like ourselves also have an important role to play in breaking down the barriers to home ownership for first time buyers – for example by providing long-term fixed rates that give greater predictability on outgoings, and products that support family members to help others to buy.”