Not much blue sky thinking.

Government's housing strategy gets lukewarm response

Published:  23 November, 2011

LONDON: Industry has welcomed the Government's housing strategy but dismissed the measure as too small.

At least 27 major housebuilders, including the vast majority of listed firms, have signed up to the Government's mortgage guarantee scheme, the centrepiece of its housing strategy, which was launched yesterday.

"The mortgage indemnity scheme is certainly the main highlight of today's housing strategy. However other key announcements, including the £400m Get Britain Building pot for stalled building sites, lack detail as it is unclear where this funding will be coming from and how it will be implemented," said Noble Francis, economics director at the Construction Products Association.

"The proposals surrounding the Right to Buy scheme are interesting but unfortunately are not likely to have an impact in the short to medium term as the Government has made clear its intention to consult before moving forward," he added.

"At present, government itself estimates that more than 260 000 households will be created each year over the next two decades, yet housing supply remains at less than half this figure. Although the measures announced today are a welcome attempt at addressing the failing housing market, much more needs to be done."

A spokesman for the Home Builders' Federation, which led negoations over creating the new scheme, said all of the major banks have already signed up in principle to the terms of the deal.

Other announcements in the government package include:

  • A £400m Get Britain Building funding pot, designed to get stalled schemes restarted, and based on the Kickstart scheme devised by Labour.
  • A competition inviting councils and communities to identify sites large scale development, which will take advantage of a streamlined planning processes.
  • Confirmation of policy changes designed to increase institutional investment in the private rented sector, with changes to stamp duty rules around bulk purchases, and reforms to the Real Estqate Investment Trust regime.
  • Reform of the Right to Buy regime designed to encourage more sales, with receipt re-invested in new homes. Social housing tenants will get up to half off the value of their home to encourage them to purchase.
  • A £50m funding pot to bring empty homes back in to use.
  • A £30m funding boost for self-builders.

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