Forecasts by the Office for Budget Responsibility (OBR) show government planning reforms mean housebuilding will reach a 40-year high with 1.3 million homes predicted to built in the next five years.
The Chancellor said this was ‘within touching distance’ of the 1.5 million target for new homes the government had promised in its election manifesto.
But, aside from the homebuilding forecast, today’s statement had little else to offer first-time buyers and homeowners.
This will come as a blow to many people going through the process of purchasing a home at the moment who were hoping for a U-turn on stamp duty tax hikes, which are due to come into force on 1 April.
Despite this, and with a lack of housing being among the root causes of the housing crisis, the reports from the OBR were welcomed.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Our first wish was granted – the Chancellor didn’t do much, if anything, to deter existing activity in the housing market.
“The first way of dealing with a problem is to recognise it and the government seems to have realised that there is a housing crisis. It has been widely accepted that affordable housing in particular is insufficient and improving planning is a significant contributor to that aim.
“Rachel Reeves said herself that it is too slow so the extra funding announced yesterday in the social and affordable homes programme is good news, although we still need more detail of where, when and how those spades are going to be in the ground.”
More help needed for first-time buyers
Others, whilst applauding the homebuilding forecasts, felt the government could go further with their reforms.
Jonathan Stinton, head of mortgage relations at Coventry Building Society, said: “What matters now is making it happen, fast. We’re already a year into the initial 1.5 million homes target – now we need to see more homes actually being built, not just commitments being repeated.
“Housebuilding is crucial to tackling the housing crisis, and while plans and targets set the direction, it’s the delivery that counts. We need projects happening at a scale and pace to meet demand – there’s still a long way to go, and time is ticking. The focus now must be turning promises into real homes for the people who need them.”
Felicity Barnett, lender operations manager at Mortgage Advice Bureau, said more must be done to help buyers finance the homes, particularly first-time buyers.
“More emphasis needs to be placed on the first-time buyer market” she said. “As an industry, we must now work as a collective to lower the current average first time buyer age of 35+, providing those in their twenties with more accessible, affordable options to get on the property ladder.
“In particular, there needs to be a marked shift in boosting the number of renters transitioning to become first time buyers. These are prospective homeowners who are currently trapped by strict affordability criteria.
For starters, more could be done at government level to fully realise Shared Ownership’s true potential, but this still won’t be enough on its own to achieve housebuilding targets.
“We’ll wait with bated breath to see how the FCA’s proposals to relax mortgage lending rules develop in the next few months.”
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