Among George Osborne ‘s many changes pledged in his Autumn Statement was the announcement that £7 billion would be used to fund the building of at least 400,000 new affordable homes across the UK.
This new plan marks the largest house building project since the 70s, according to Osborne, and will kick off at some point in 2020/21. Following this particular announcement, stocks in private house building groups soared, with groups like Berkeley and Persimmon, among others, seeing their share prices go up by more than 6%. This was partly down to the fact that of that quoted figure of £7 billion, around £2.3 billion is to be given directly to developers.
This announcement was one of many shifts in the housing market, and one of many economic changes that, in all, amount to shaving around £20 billion from the budget of various government departments, and some £12 billion from the welfare system.
Osborne ‘s intention, which he made clear using figures backed up by the OBR, is to boost economic growth consistently and to reduce the national deficit both in raw terms and as a percentage of national income so that we see a surplus by 2019/20.
Turning back to the housing market, Osborne ‘s ostensible aim here is essentially to boost home ownership in the face of soaring numbers of private landlords, and to generally work to curb the rate at which house prices are going up ñ particularly insofar as they are generally outstripping wage growth.
Part of this involved adding a 3% Stamp Duty surcharge, payable on buy-let properties that will come into play in April of next year. He also made changes to the Capital Gains Tax system, making it now payable within 30 days of the sale of any relevant property, rather than by the following tax year.
He also plans to implement changes to the existing Help to Buy scheme, particularly as it applies to properties in London.
The first, and most tangible of these changes, will involve spending £4 billion on building 135,000 new homes designed for shared ownership.
Then comes the changes to the salary criteria, increasing it to £80k outside of London, and £90k inside.
The new London Help to Buy scheme will be applicable on homes worth anything up to £600,000 and involves the provision of a loan of up to 40%, with the requirement that the borrower gets a mortgage worth at least 25% of the property ‘s value to supplement it. This loan will then have to be paid back either upon sale of the property, or 25 years after it has been issued, whichever comes first.
Further changes included a promise to spend £400 million on building around 8,000 specialist homes for the elderly and disabled. This was one of many changes (some welcome, some less so) to the health and social care system that included a pledge of some £6 billion of extra funding to the NHS next year, delivered through a combination of initiatives including some “efficiency savings.”