The British Property Federation has questioned the effectiveness of the Government’s £1bn housing measures unveiled yesterday as it said measures are only focused on home ownership.
Speaking to the BBC, the BPF said that the government should focus on stirring new development and dealing with the massive demand for rental housing by providing incentives to create a large professional rented sector. In Germany, the rental sector of the housing market makes up 50% of the housing market, compared to just10% in the UK.
Doubts about loan scheme
The BPF also expressed doubts about the effectiveness of the new interest-free 30% equity loan scheme, being jointly funded by councils and developers. It said such buyers may yet have trouble raising funds due to being perceived as ‘sub prime’.
Ian Fletcher, BPF director for residential policy, said: ‘We welcome these announcements but question why so many are focused on home ownership when it’s clear that demand for rental housing is soaring. The country faces a number of housing crises and whilst this will target help at those home buyers in most desperate need, it will need to be augmented in the forthcoming months if it is to be seen as a truly comprehensive package.
‘We need to look to Europe and develop a branded rental sector funded by institutions which would deliver truly affordable well-managed homes. Incentivising investment in build-to-let would cost the government practically nothing. We also need to revise the way stamp duty is unfairly aggregated meaning that big investors pay more than they should and look at how rental is treated for planning purposes.’
Fletcher said while measures to help first time buyers were welcomed the stamp duty cut on homes below £175,000 was a ‘relatively blunt instrument’ which would vary significantly across the country because of different house prices in different regions.
‘Overall, these measures are a step forward, but several more will be needed on what will be a long road to recovery and growth in the housing market,’ said Fletcher.