Budget “Help to Buy” scheme to boost housing

Grant Prior 11 years ago

George Osborne unveiled his “Help to Buy” scheme today in a bid to kick-start new house building via Government funding of one fifth of the cost of a new home.

The £3.5bn shared equity scheme will see the Government lend up to 20% of the cost of a new home to potential buyers currently struggling to secure a deposit and mortgage.

Buyers will have to raise a deposit of 5% before the Government helps out with interest-free loans of up to 20% on homes worth less than £600,000.

The scheme will be open to all buyers and a parallel £130bn mortgage guarantee scheme will help current homeowners looking to climb the property ladder.

He also released an extra £225m for the affordable homes programme being run by the Homes and Communities Agency. The agency now hopes to deliver up to 30,000 new affordable homes, underpinned by the Government’s £10bn guarantee scheme.

The funding will run until the end of 2016/17 and the HCA’s existing bidding round will be extended to the 21 May

An additional £800m for Built to Rent on top of the £200m unveiled last September will be released. This recognises strong demand for the HCA’s existing funding programme.

Investment will run until the end of 2015/16.  The HCA’s Build to Rent programme is part of the Government’s response to the Montague Report and recognises that high quality, well managed homes for rent will play a significant part in meeting the country’s housing needs.

Richard Threlfall, KPMG’s Head of Infrastructure, Building and Construction said: “The Chancellor’s ‘Help to Buy’ scheme looks like the perfect “get out of jail” card.

“It’s a bold move, perhaps a desperate one, but one that will be undeniably welcome by the beleaguered construction industry.

“The Government has finally recognised that housing might offer the fastest acting pain relief for our economic woes and, perhaps despairing of local authorities to be proactive in supporting new house building, has decided to focus stimulus on demand.

“By opening the scheme to all buyers of new-build houses up to £600,000 in value, the Chancellor has thrown the UK house building industry a new lifeline.

“Ultimately, the construction industry and all trades that support construction of new houses in the UK will benefit from the new scheme.”

The Chancellor also confirmed an annual £3bn increase in infrastructure spending from 2015/16 – worth up to £15bn by the end of the next Parliament.

The plans will be funded by a switch from current to capital spending as Whitehall departments face further spending cuts and a renewed efficiency drive.

Osborne said: “We need to provide the economy with the infrastructure it needs.

“We’ve switched billions of pounds from current to capital spending. By using our extra savings we will boost our infrastructure spending by £3bn from 2015/16.”

Duncan Symonds, UK Head of Infrastructure at global consultancy WSP, said: “It’s disappointing that the Chancellor’s recognition of infrastructure as the ‘economic arteries’ of this country wasn’t backed up by more detail on the ‘how’ and ‘when’ they will be unblocked.

“£15bn extra funding is a welcome injection but it is realistically a small contribution to the £50bn needed by treasury’s own estimation, and most importantly, it will be futile if not backed by clear commitment to the programme, more detail on the delivery and support from the private market – so far not readily forthcoming.

“Lord Deighton’s role in the delivery of projects is therefore very good news, as is the increased use of independent advisors.

“There also needs to be recognition that while the big red tape projects are important, the smaller, less sexy projects, like flood defences, electrification and maintenance and repair programmes are equally important and in some cases can have more immediate impact on the economy, creating jobs and building asset value.”

Osborne also announced a cut to Corporation Tax which will see it drop to 20% by April 2015.

Contractors will also benefit from a new employment allowance to cut national insurance bills by £2,000 for every firm while 450,000 small firms will pay no employer national insurance at all.

Picture 2



Latest news

HS2 viaduct blunder over wonky concrete segments

Align JV now drilling out concrete joint as part of week-long remedial work
17 mins ago

Four arrested in £140m property fraud probe

Serious Fraud Office investigating collapse of property developer Signature Group
2 hours ago

London £3bn housing framework out to tender

SMEs allocated slots on London Construction Programme housing framework refresh
7 hours ago

BAM wins first major RAAC school rebuild

Contractor seals £46m deal for St Leonards school in Durham
8 hours ago

Failed strip out specialist owes £1.5m to supply chain

More than 100 subcontractors and suppliers left with unpaid bills by Type Ten Limited
9 hours ago

Councils to turn screw on building owners over fire safety upgrades

Government tells councils to step up legal action against rogue building owners
8 hours ago

Green light for £300m Fenland energy from waste scheme

Wisbech incinerator will generate 50MW from half a million tonnes of waste
22 hours ago

Multiplex starts on 50-storey Thames tower

Developer green lights construction of latest phase of £3bn Bankside Yards scheme
1 day ago

McLaren lodges fresh Reading Broad Street Mall plan

Town centre scheme will deliver 600 homes in four towers
1 day ago

Beard bags £24.5m Bristol office revamp

Construction to start in April
8 hours ago

SMEs star in £3.2bn social housing upkeep deal

Around 85% of Efficiency North's framework winners are local firms
1 day ago

Scottish NHS new building projects delayed for two years

Spending clampdown hits over a dozen planned projects
1 day ago

Balfour M25 workers hold strike ballot

Motorway maintenance crews unhappy with 3.4% pay rise offer
1 day ago

Rainsford Contracts acquires M&E specialist

Expanded contractor will have turnover of £45m
1 day ago

Statom expands with launch of Northern HQ

RC frames specialist now targeting jobs in Scotland and north of England
2 days ago

High Court dismisses Stonehenge tunnel challenge

Judge quashes legal challenge against Government consent for £1.7bn job
2 days ago

£1.5bn Teesside carbon capture scheme consented

Final investment decision expected this year for construction start
2 days ago

First viaduct steel section installed at HS2’s complex junction job

Victor Buyck Steel Construction install first 300t viaduct section
2 days ago

Sister scaffold firms file administration notices

BCM Scaffolding Services and Scaffteq West employ 100 people between them
2 days ago

McLaughlin & Harvey suffers £8.6m loss

Cost inflation and Scottish landfill tax legislation hit Antrim-based group
2 days ago

Regulator opens probe into National Highways delivery

ORR concerned about 'dip in performance' on capital projects
2 days ago

Sir Robert McAlpine chief Paul Hamer exits

Hamer replaced as CEO by former Lendlease Europe boss Neil Martin
5 days ago

Unite Students to build £250m Newcastle scheme

Work to start this summer on revamp of Castle Leazes site
2 days ago

Britcon poaches Tilbury Douglas business development chief

Don Stewart joins Britcon board as strategic director
2 days ago

Building control system on verge of collapse

Calls to delay new registration scheme
5 days ago

Go-ahead for UK’s largest mass timber structure neighbourhood

Visionary 685-home sustainable village will be built in Lewes, East Sussex
5 days ago

£90m Manchester zig-zag library approved

Work to start this summer on iconic city centre building
5 days ago

Mace clear to start £34m weather-watching HQ job

Planning granted for European Centre for Medium-Range Weather Forecasts
5 days ago

Ford Dagenham site revamp to hit nearly 4,000 homes

Latest phases approved for £1bn Beam Park redevelopment
5 days ago

Sisk names new data centres regional director

John Hennessey appointed to lead expansion
6 days ago

Contractor services