This month, London mayor Sadiq Khan announced plans to enable Londoners to have “first dibs” on new-build homes on brownfield land up to the value of £350,000 for the first month of their release.
Other UK buyers would then get an advantage for the next two months before the homes could be offered to foreign investors.
However, I do wonder if these proposed measures are likely to make a significant impact on the number of new homes being delivered, or the number of first-time buyers who actually buy. In recent years, the government has introduced several ideas to promote a more even playing field for UK-based buyers – and first-time buyers in particular.
While I appreciate the sentiment, I am pretty certain these measures will not achieve the intended goal. Many of these policies have effectively put buy-to-let investors and first-time buyers on a collision course.
Massive increases to stamp duty at the upper end of the property spectrum have effectively pushed investors into a space traditionally occupied by first-time buyers. At the same time, the Help to Buy scheme introduced by the government only actually kicks in six months prior to completion of a development, which is far too late for a developer to achieve forward sales to make it viable.
Perhaps it is time to look at this problem through a different lens? Surely the key is to generate greater supply – not only would this help moderate pricing; it would also generate more social affordable housing.
Instead of taxing investors, why not get them to help solve the problem? Why not double the additional stamp duty surcharge on buy-to-let investors below £350,000 and make it zero above? Perhaps we can do more to embrace the international investors from all over the world who see the UK as somewhere they want to invest their hard-earned funds.