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Budget 2015: A roundup from industry commentators

From Property Talk Live on March 19, 2015

The introduction of help to buy ISAs was the major housing news in George Osborne’s final Budget announcement before the election. CIH interim chief executive Gavin Smart’s gives his initial take on the initiative.

“We are in the grip of a severe housing crisis. For decades we have failed to build enough new homes to keep up with our growing population, and the gap between the haves and have nots is getting bigger all the time. For many people, affording a decent, suitable home either to rent or buy is a distant dream.

“While the help to buy ISA may help some first time buyers to overcome barriers to home ownership, it fails to address the fundamental problem – that we are simply not building enough homes. Stimulating demand without also addressing the issue of supply runs the risk of further fuelling house price rises.

“We need strong political leadership to rise to the challenge of fixing our broken housing system. This is why we are asking all political parties to commit to solving the housing crisis within a generation.”

Andrew Bridges, Managing Director of estate agent Stirling Ackroyd, comments:

“The Chancellor has confirmed regeneration from Brent Cross to Croydon, and new powers for the Mayor to cut through red-tape planning and provide the homes that London desperately needs. A funding infusion for the London Land Commission to identify the best areas to build will be a boon for the City – our research has already identified potential space for over half a million homes, with new home hotspots concentrated in East London. London has the capability to meet the demands of its growing population, but the politicians need to take an axe to the red tape if that’s going to get the job done.

“The new Help-to-Buy ISA will lift many thousands of people onto the housing ladder – but it doesn’t address the realities of buying in London. Although a 25% top up to first-time buyers’ deposits will put power back into the hands of savers whose cash pots have been sapped by low interest rates, it may not be enough. Placing a finger on one side of the nation’s financial scales is only half the battle. It’s bricks and mortar that puts a roof over your head – let’s hope the London Land Commission do their homework. London can be housed. You just need to know where to look.”

Peter Girling, Chair, Girlings Retirement Rentals says:

“The Budget brought some welcome news concerning people’s pensions with the announcement that up to five million pensioners will be given the freedom to sell their annuity for a cash lump sum.

“From April 2016, people who already have an annuity will be able to now effectively sell it on, so that they too can benefit from the pension freedoms announced at last year’s Budget.

“Currently, people who have bought an annuity are unable to sell it without having to pay at least 55% tax on it. From April 2016, the tax rules will change so that people who already have income from an annuity can sell that when they choose and will pay their usual rate of tax they pay on income, instead of 55%.

“However, the Budget did little to address the housing needs of the country, in particular the needs of an ageing population.

“Whilst first time buyers will be given a boost whilst saving for a deposit with a £50 bonus from the Government for every £200 saved in an ISA, there we no incentives for those at opposite end of the property ladder.

“The Budget came just one day after the largest rally yet for people protesting about Britain’s housing crisis. The “Homes for Britain” rally saw thousands of people gather at Westminster yesterday to protest at governments’ failure to address the shortage of affordable housing in the UK.

“Whilst the government has in recent years introduced the Help to Buy Scheme to help first time buyers, the lack of affordable housing for both young and old is a major issue that must still be addressed.

“The majority of building has been focused on high spec city centre flats aimed at young professionals and there are few developments that can be classed as affordable housing or aimed at the retirement market.

“With one in three people expected to be aged 55 and above by 2030, the government needs to be planning where these people are going to live.

“The desire to downsize is strong amongst Britain’s pensioners, but many are prevented from doing so because of a lack of suitable retirement properties in desirable locations.

“The result is a property bottleneck. Eight million people live in homes too large for them to manage and too expensive for them to heat. At the other end of the ladder, millions of families can’t find appropriate housing for their needs.”

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Source: Property Talk Live