Boris Johnson pledges £58M to build new homes but will it solve housing crisis? Expert
Budget 2020: Rishi Sunak details affordable housing plans
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Prime Minister Boris Johnson has launched his ‘levelling up’ agenda with a multi-million-pound pledge to solve the UK’s affordable housing crisis. The funding will allow 53 councils across England to fund 5,600 new homes – though housing experts are questioning just how effective these new builds will be in creating an ‘equilibrium’ in the housing market. Express.co.uk spoke to property experts GoodMove to find out what the funding really means for the market.
Where will the houses be built?
The funding is set to be divided between 53 councils all over England to tackle regional inequalities in the housing market.
The funding is broken down into nine regions, each receiving a different amount:
- South West – £17.7m
- South East – £14.3m
- London – £12.7m
- West Midlands – £3.6m
- Yorkshire & The Humber – £2.7m
- North East – £2.5m
- East of England – £2.4m
- East Midlands – £1.8m
- North West – £0.2m
The Department for Levelling Up, Housing and Communities (DLUHC) is spearheading the project, using the £58 million funding to build new homes on derelict UK land.
According to the BBC, the funding has been re-allocated from the £75m Brownfield Land Release Fund (BLFR) which is used to transform disused sites into “vibrant communities”.
Speaking to Express.co.uk, Ross Counsell, chartered surveyor and director at GoodMove said: “We have seen a prevailing idea among politicians that building more houses is a solution to the current housing crisis.
“However, building these houses without being aware of who can afford to purchase them, does little to help those with lower incomes to get onto the property market.”
How will the funding level out the competitive property market?
Buyer demand is still exceptionally high with the October figures from the RightMove HPI showing active buyers up 66 percent from a year ago.
According to the Halifax October HPI, the average UK house price has reached a record high of £267,687.
Ross said: “The funding sees the government take a step in the right direction to create an equilibrium between housing supply that fails to keep up with demand.”
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Who will be able to buy the new homes?
Previous government schemes have set out to help first-time buyers and those being priced out of the property market prior to this new funding.
The first time buyer scheme and stamp duty holiday has optimistically aimed to help buyers get a footing on the property ladder, but experts at GoodMove have argued the after-effects of these incentives can often be more damaging.
Ross said: “This saw many of the first-time buyers and lockdown savers unable to compete with rising house deposits.”
Concerns over the allocation of the funding have led to questions over the Government’s attempt to tackle regional inequalities in the market by levelling out house prices.
According to GoodMove, around three-quarters of the DLUHC’s money is pledged to councils in London and the South of England – despite property prices having slowed in these areas.
With significant disparities in the funding of UK regions, pinpointing the buyer market for these new ‘affordable’ homes is yet to be done.
Ross said: “Hopefully if the government can fulfil the 5,700 new homes pledged, we could see house prices begin to stabilize in the future.”
“However, if the government were to add regulations outlining exactly who can purchase the new build properties from the funding, this would fare much better for helping first-time buyers get a footing on the property ladder.”
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