The government was on the bandwagon again this month unveiling a package to help first time buyers onto the housing ladder.
Sounds great and its an obvious vote winner among the English where our homes are our castles until deeper examination reveals only about 20,000 people will be eligible for help over the next three years. So what can politicians really do and should they even be meddling in the housing market in this way.
In the UK, there is a cultural desire to own a property – it is believed to be imperative to own the roof over one’s head. When you look long term, you can see a good financial reason too. When drawing a pension, would it be easy to still be finding the monthly rent for your landlord at 65+ years old? There are enough worries about how to live on a pension without it having to cover rent – which has traditionally not been needed as a mortgage is normally paid off by then. It could be a pension time bomb!
Having recognised how important it is, politicians should do more to make housing affordable.
This means, providing more homes within shared ownership schemes, available to more people, providing properties within trusts at cost and keeping making sure people can still afford them. In fact, the whole concept of joining forces with another party to reduce costs whether the co-owner be a friend, sibling or housing association should be promoted – it can mean that a larger more spacious home can be afforded and costs can be significantly reduced, whilst importantly, a mortgage is starting to be paid off.
Helen Adams of the first time buyer advice site, FirstRungNow.com says: “I constantly hear from those who visit us that they wish shared ownership schemes were more widely available. They don’t just mean the number of them, but also that eligibility should be widened. I’m sure the Government could do more to incentivise housebuilders to build more low-cost houses and offer more shared ownership schemes to bolster the numbers supplied by Housing Associations.”
Gordon Brown recently threw voters a juicy morsel in the form of a change to the stamp duty threshold but in many cases, especially in the South East the change made absolutely no difference to affordability as the average starter house price is above ?120,000.
Stamp duty it is just one of the many factors that makes buying a first home expensive – along with finding a deposit and arranging finance to buy the property. Raising the threshold helps – but it would also help landlords, so taxing landlords higher on the income they gain from their rental properties could help discourage them from this avenue as an investment.
A rethink of the structure of stamp duty and who it should be paid by should be carried out. Whilst it has earned the Government a great deal of money, the recent changes only serve to earn the Government marginally less.
Mark Hanson is Producer and Presenter of political podcast The Big Issue