Right To Buy Faces Further Criticism

New rules provide local authorities with more flexibility with regard to how Right to Buy receipts can be spent -  councils are now permitted to use RTB receipts to cover up to 40% of the costs of building new homes, as opposed to the previous 30%. Also, the deadline for utilising the proceeds of Right to Buy sales was increased from three to five years. The scheme, however, is facing mounting criticism over the extent to which the Treasury has profited from RTB sales, to date more than £47 billion. Official figures regarding how much has been invested directly into the social housing infrastructure have never been fully disclosed, leading many to conclude that the government is using RTB as a cash cow. Read more on the Real Business website.

Right to buy faces further criticism due to social housing shortages - (realbusiness.co.uk) 

Nearly 325,000 Homes Purchased Through 'Help To Buy' Scheme

Almost 325,000 homes across the UK have been bought through the government’s Help to Buy housing scheme since its launch in December 2015. Help to Buy ISAs — through which the government boosts first-time home-buyers’ savings by 25%, up to a maximum of £3,000 — have now supported 323,767 property completions, official data shows. So far, 426,565 “bonuses” — or government boosts — have been paid out, with the average bonus coming in at £1,000, leading the overall value of bonuses to £426.74m by the end of March, according to the Treasury. Read more on the Yahoo Finance website.

https://uk.finance.yahoo.com/news/nearly-325000-homes-purchased-through-help-to-buy-scheme-143748310.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuaG91c2luZ25ldC5jby51ay9Ib3VzaW5nX05ld3MvSG91c2luZ05ldF9OZXdzX1VubG9ja2VkLmh0bWw&guce_referrer_sig=AQAAAC7HibRXiCLQ-PEfHThhZMrZGfo8m__17Rs-mfPP80Lt0NhGku68cMY_UbHzV8sck0VSkebaS7uoiMlHt5M0u2RQGqAl1HB2EB9M-2s6dcPU8yUlFSW-185puyCAPHboR8SdHklmFBg4LrrMrSsbRtCQQRKM41M61iUIUTiEsjhr

Coronavirus: Home Insulation 'Could Create Cheap Jobs'

Making people's homes cosy is the cheapest way to create jobs as the UK prepares to fight recession, a report says. Its authors say a job insulating homes would be much cheaper than creating a road maintenance job, for example. Jobs in building roads are more costly to create, as the work is heavily mechanised. The figures will be sent to the Treasury, which is reviewing a package of job stimulus measures for July. The report's authors say a job in home insulation can be created for £59,000 - that's far less than a road maintenance job, which is estimated by the government to be more than £250,000. Read more on the BBC website.

https://www.bbc.co.uk/news/business-52999337

Government Announces Further Financial Support – Including Mortgage Holidays

The Chancellor, Rishi Sunak, has announced a series of measures to support individuals and businesses during the coronavirus outbreak. This included the announcement that the Treasury has agreed with the body representing mortgage lenders, UK Finance, that lenders will support customers who are experiencing issues with their finances as a result of COVID-19 and the options include a payment holiday of up to three months. Although nothing has been guaranteed for buy-to-let customers, UK Finance have told us  that customers who are concerned about their current financial situation should get in touch with their lender at the earliest possible opportunity to discuss if this is a suitable option for them. Read more on the NLA website.

https://landlords.org.uk/news-campaigns/news/government-announces-further-financial-support-including-mortgage-holidays

Treasury Confirms Discounts On Council Borrowing For Housing Projects

Councils are offered a discount on borrowing for housing projects from the Public Works Loan Board (PWLB). In October, the Treasury hiked the PWLB rate by one percentage point, with councils fearing a hit to housing plans. But the Budget pitched PWLB as going back to its pre-October rate. And the Treasury is also pitching plans to cut the PWLB interest rate for all borrowing, but only after it has introduced measures to ban councils borrowing to invest in commercial property. A wider consultation on changes to the PWLB is underway, with Government saying that once a “workable system” is designed and implemented, cuts to the interest on all new loans from the PWLB will come. Read more on 24housing.

https://www.24housing.co.uk/news/treasury-confirms-discounts-on-council-borrowing-for-housing-projects/

Treasury Says Spending Review Will Focus On Housing

HM Treasury has announced it will focus on providing housing support and pump money into core public services in its next spending review. Elizabeth Truss, chief secretary to the Treasury, said this year’s spending review, which sets budgets from 2020 to 2023, would tackle the UK’s restrictive planning system where people which led to people spending a greater proportion of their income on housing than ever before. In a speech, she said: "In 1947 people were paying less than an eighth of their total expenditure on housing, now it’s over a quarter. And people who rent in London are spending half their income on rent.” Read more on the FTAdviser website.

https://www.ftadviser.com/your-industry/2019/03/20/treasury-says-spending-review-will-focus-on-housing/

Budget 2018: Housing

The Treasury has issued a summary of housing related measures announced in the Budget on 29 October 2018, including:

• a new Help to Buy Equity Loan scheme that will run from April 2021 for 2 years

• extending Stamp Duty Land Tax relief for first time buyers to purchases of all qualifying shared ownership properties

• further investment to deliver more homes, including an extra £500m for the Housing Infrastructure Fund

• confirming that the Housing Revenue Account cap that controls local authority borrowing for house building will be abolished from 29 October.

Read the full briefing on the Treasury website.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752109/Housing_web.pdf

Hammond Urged Not To Launch "Tax Attack" On Second Home Owners

Philip Hammond has been warned against hiking levies on buy-to-let properties over fears the move would result in lower revenues for the Treasury. Two former Conservative cabinet ministers criticised reported plans for an increase in the government levy charged on buy-to-let purchases, which are said to be under consideration for the autumn Budget. John Redwood, the former trade secretary said: “There is no need to increase taxes and if you carry on increasing them you'll collect less money from people, which is the opposite of what we want to achieve.” “The answer for the Treasury is cut stamp duty and you’ll raise more money.” Read more on the Daily Telegraph website.

https://www.telegraph.co.uk/news/2018/08/04/hammond-urged-not-launch-tax-attack-second-home-owners-new-buy/

Tories Turn Fire On NAO Over Damning UC Report

Forced on the defensive by the damning NAO assessment of Universal Credit (UC) Tories turned their fire on – the NAO. With a little of the ‘the last Labour government’ thrown in. Architect of the ‘reform’ Iain Duncan Smith led the charge calling the NAO report  – which branded UC a major failure of public policy – as a “shoddy piece of work” that didn’t account for a series of issues. “Not least of which are that the Treasury signed off annual recurring savings of £8bn and, more importantly, that the changes last November and December have made a huge difference to people’s lives,” he said. Read more on 24housing.

https://www.24housing.co.uk/news/tories-turn-fire-on-nao-over-damning-uc-report/

Councils And ALMOs Call For Flexibility In £1bn Borrowing Cap

Council housing representative bodies are urging the government to set out flexible bidding criteria for the £1bn of additional borrowing headroom announced in the Autumn Statement. The Association of Retained Council Housing (ARCH), the National Federation of ALMOs (NFA) and the Local Government Association (LGA) are also calling on their members to prepare to bid for the debt. There are fears that too much red tape could cause the programme to be undersubscribed – as happened when the Treasury announced a similar policy in 2014 – damaging future opportunities of funding for council housebuilding. Read more on Inside Housing.

https://webcache.googleusercontent.com/search?q=cache:5slWa1zxiP8J:https://www.insidehousing.co.uk/home/home/councils-and-almos-call-for-flexibility-in-1bn-borrowing-cap-programme-54835+&cd=2&hl=en&ct=clnk&gl=uk&safe=vss

Abolish Borrowing Cap So Local Authorities Can Increase Housing Supply

In Autumn Budget 2017, the Government raised the borrowing cap for councils in areas of high affordability by £1 billion to help achieve its target of 300,000 new homes per year. Private housebuilders have consistently provided 150,000 units per year, so the target is unlikely to be met without a significant increase in supply by local authorities. To achieve this, the Housing Revenue Account borrowing cap should be removed. At the very least, the Treasury should define the allocation criteria for the additional £1 billion more clearly. Read more on the Parliament website.

http://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/news-parliament-2017/budget-autumn-2017-report-published-17-19/

Help To Buy Prices Hit Record High

The average price of first-time buyer properties bought with Help to Buy equity loans in England has hit record levels growing at a rate that outstrips wages, official figures show. The mean purchase price for first-time buyer properties bought under the scheme between July and September last year was up 12% to £278,189 from £249,234 in the same period in 2016. In the same timeframe, the average total applicant household income under the Help to Buy equity loan scheme was up to £54,019, increasing from £50,302 in 2016. Download the figures from the Treasury website.

Government Has No Plans For Stamp Duty Holiday To Encourage Downsizing

Before the Autumn Budget there were calls for older people in Britain wanting to downsize to be given a stamp duty holiday to encourage them to do so and free up houses for families. But the Government has now made it clear that it does not back such a move and has no intention of introducing any such tax break. In written evidence to Parliament’s communities and local government committee on the subject of housing for older people, the Treasury says that providing a tax break for those looking to downsize benefits an already wealthy group of people. Read more on Property Wire.

Reverse Cuts Or Backing For Universal Credit May Collapse

Public confidence in universal credit will collapse without an urgent £3bn cash injection to reverse cuts that are set to leave millions of families worse off, an influential thinktank has warned.  The Resolution Foundation says a spree of Treasury-driven welfare cuts since 2015 has left universal credit unable to meet its original aims of strengthening work incentives and supporting the incomes of low-income families. It warns that the current fragile political consensus in support of universal credit risks breaking down unless ministers refinance the reform and fix multiple design and implementation problems. Download a copy of Universal Remedy: ensuring Universal Credit is fit for purpose from the Resolution Foundation website.

Help to Buy Scheme – Parliamentary Written Answer

Lord Cooper of Windrush: To ask Her Majesty’s Government what has been the total cost of the Help to Buy mortgage guarantee scheme since its introduction. 

To ask Her Majesty’s Government how many (1) individuals, and (2) families, have bought homes through the Help to Buy mortgage guarantee scheme.

Baroness Neville-Rolfe: The total cost of running the Help to Buy mortgage guarantee scheme from its introduction in 13 October to 31 March 2016 was £11.9 million. This has been paid in full with the commercial fees collected from lenders. The Treasury routinely publishes Official Statistics on the performance of the Help to Buy: mortgage guarantee scheme. The most recent publication was on 30 March 2017. This showed 101,960 mortgages had been completed with the support of the scheme. We do not record whether mortgage applications submitted to the scheme are made by a single individual or jointly.

Councils Forced To Pay £800m In RTB Cash Back To Treasury

Councils have paid over £800m in cash from right-to-buy sales back to the Treasury over the past five years. The sum arises out of a response from Housing Minister Gavin Barwell to a written question from Shadow Housing Secretary, John Healey. Barwell said the practice of seizing the local authority funds was “part of addressing the deficit in the nation’s finances.” However, Labour has called the revelations “shameful” and produced analysis showing that money could have been used to build 12,586 additional council properties – almost double the number actually built over the last five years. Healey is now urging the Chancellor to use the Budget to build more council homes. Read more on 24housing.

Social Rents Have Increased Faster Than Earnings

Social housing rents have increased faster than earnings over the last 15 years, according to a National Audit Office (NAO) report. The report into the housing market and policy in England said between 2001/02 and 2014/15 typical full-time earnings increased by 33% but typical rents for council properties increased by 79% and housing association rents increased by 72% in the same period. The NAO said different government departments can have “conflicting objectives”. An example was the introduction of the 1% rent reduction, announced by the Treasury, which reduced the ability of housing associations to scale up their development plans and might impact the Department for Communities and Local Government’s plan to build one million homes by 2020. Download the report from the NAO website.

£13bn Housing Investment Included On Infrastructure List

Investment of almost £13bn in 18 housing projects and programmes has been listed in the government’s £500bn infrastructure pipeline. The Treasury has published a list of all the publicly backed infrastructure investments it foresees through to 2021 as a “strategic overview” of planned investment. The pipeline includes 700 projects of all kinds worth some £500bn, more than 40% of which is government investment. Housing investment totals £12.9bn, with several large housing projects, the Affordable Homes Programme and Accelerated Construction funding all included. The Treasury is publishing a full list of infrastructure investments to provide a “single source of data for both government and the private sector, giving greater certainty for investors and suppliers”. Download the details from the Gov UK website.

Housing Gets £4bn Boost To Increase Number Of New Homes

The chancellor committed almost £4bn to housing in his autumn statement, in a move he said represented a step-change in the government’s ambition to increase the supply of homes for sale and rent. The money, which the Treasury said was new cash, will be spent through two funds: one providing money for infrastructure projects to make sites viable for building, the other providing money for affordable homes. Measures to tackle the housing crisis included:

·         A £2.3bn housing infrastructure fund for local authorities to help deliver up to 100,000 homes

·         An extra £1.4bn for local authorities and housing associations to provide affordable housing to rent or buy

·         The roll-out of right-to-buy to 3,000 more housing association tenants

Read more on the Guardian website.

Help To Buy: ISA – 6 Things You Might Not Know

1.       Several banks and building societies offer the Help to Buy: ISA

2.       You can put up to £200 away in your Help to Buy: ISA per calendar month

3.       Your bonus funds must be used towards your property’s completion

4.       The interest you earn on the money in your account will count towards your government bonus

5.       When you are ready to purchase your first home your solicitor or conveyancer will apply for your bonus

6.       You need to apply for your bonus within 12 months of closing your account

Read more details on the Treasury website.