Budget “Help to Buy” scheme to boost housing

Grant Prior 12 years ago
Share

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

Balfour Beatty terminates Danny Sullivan labour deals

Around 500 workers on HS2 will be moved to alternative agencies or be taken on direct
1 day ago

Trio face prosecution after Hinkley site death

Main contractors and client to face charges over death of site supervisor
1 day ago

Buyers see recovery in house building sector

But civil and commercial work still in the doldrums
2 days ago

Apprentice saws-off thumb on hotel refurb site

Court hears how digit was reattached and teenager continued training with another firm
2 days ago

Laing O’Rourke tops June contracts league

£919m animal super lab dominates new orders
2 days ago

TSL turnover smashes £500m as profit almost trebles

Data centre and logistics contractor rises high on surging demand
2 days ago

Gleeson Homes chief exec leaves business after restructure

Management revamp after "challenging" year
2 days ago

Green light for 1,600-home Oldham town centre overhaul

Plans for over 1,600 homes across six regeneration sites approved
2 days ago

DSM wins Norwich city centre clearance job

Anglia Square shopping centre clearance for £300m scheme
2 days ago

13-year-old becomes UK’s youngest qualified digger driver

Grandson of Gallagher Group chairman sets industry record
2 days ago

Cubby reborn in £12m Svella-backed takeover

£50m revenue target set as 14 firms combine under new Cubby Group banner
3 days ago

North East NHS trusts plot £3bn health estate overhaul

Market engagement begins for major construction push across four trusts
3 days ago

HG goes green on cranes in £1.2m switch to battery power

Diesel-free crane drive cuts fuel bills by 94%
3 days ago

Developer fined £165,000 for fire safety failings

Firm ignored fire safety orders on apartment job in Preston
3 days ago

Bidding to start for £1.8bn North West framework

Contractors invited to bid for latest Procure Partnerships deal
3 days ago

Hill hits record £90m profit as homes pipeline swells

Build-to-rent push and £4.8bn contracting book to fuel next growth phase
3 days ago

Rayner unveils £39bn plan to build 300,000 social homes

Council building revival and rent reform feature in social and affordable homes plan
4 days ago

Keltbray bounces back with £3.2m profit

Tighter controls and smarter project selection fuel strong turnaround
4 days ago

VINCI JV wins 500-home twin town centre revamps

Chester Northgate phase 2 and Northwich Weaver Square schemes move to delivery stage
4 days ago

80 energy projects unlocked as Ofgem backs grid expansion

£24bn energy networks deal gets green light from regulator
5 days ago

How to see your stories on the Enquirer

Join our Suppliers and Buyers directory to get your news published
4 days ago

Henley lands Midland Mill revamp on Leeds tower scheme

Restoration of 18th-century mill kicks off on South Bank regeneration project
4 days ago

New boss at Eric Wright Civil Engineering

Gavin Hulme takes top job as Diane Bourne moves to group role
4 days ago

Pinewood submits £1bn data centre plan

Studio giant adds green and learning spaces to tech hub blueprint
5 days ago

Record results after TClarke goes private

Britain's biggest M&E contractor flourishes after de-listing
5 days ago

Dalkia lands £200m nuclear maintenance deal

1,000 nuclear FM staff to join M&E contractor
5 days ago

Construction comeback to outpace wider economy

Arcadis forecast fueled by spending review optimism
6 days ago

First steel goes up on giant car battery site

Severfield gets to work on McAlpine Somerset site
6 days ago

Permasteelisa wins cladding deal on Bovis city tower

Facade specialist lands package at 60 Gracechurch Street
5 days ago

Fox buys recycled asphalt specialist Fisher

Acquisition adds major recycled asphalt capacity in north west
6 days ago