Last Thursday, the Tories steamed to a victory in the election gaining 24 more seats in the Houses of Parliament than at the last election, giving them an absolute majority in House of Commons after reaching 326 seats. But what does that mean for the housing market?
Well, Conservatives have pledged in their manifesto a few things that they are planning to implement, the first being a housing bill to extend the right to buy to 1.3 million housing association tenants. It has been said by others that this may spark a new housing crisis if they can’t build enough houses to replace what are being sold. Currently, it is reported that we are building around 150,000 new homes a year, which is half of what was being built for years after WW2 when in excess of 300,000 were being built every year. However, to keep up with the shortage of affordable homes 250,000 houses need to be built every year. So how are the Conservatives hoping to keep up with the demand of replacing the housing association houses and building enough to keep up with the demand elsewhere? However they do claim they will replace one for each one sold.
The Conservatives also said they would “build more homes that people can afford” including 200,000 starter homes exclusively for 1st time buyers under 40 over the course of the next parliament, which equates to around 40,000 a year. Great news for 1st time buyers, but again, only if they can keep up with the building demands.
Another pledge was to “deliver 275,000 additional affordable homes by 2020.” Brilliant for people who are in need for an affordable home, but this works out to 55,000 new homes each year. So by our calculations the Conservatives want to be building 95,000 new homes for 1st time buyers and people who need more affordable houses in addition to the ones they need to be replacing under their right to buy scheme. But as we are only building around 150,000 a year, when we need to be building 250,000 to keep up with demand, there is already a massive shortfall.
The last pledge in the private housing sector is that they will extend the Help to Buy scheme to cover another 120,000 homes. This scheme makes it possible for people to buy a new build home or existing property up to the value of £600,000 with as little as 5% deposit. Over 80,000 people have brought a home through the scheme since it was introduced. More information on this can be found on: www.helptobuy.org.uk
Let’s hope they can follow through with these pledges as the new Government does seem committed to tackling housing issues.