Housing Crisis Reforms Do Not Go Far Enough Warn MPs

Tue, 23 Jan 2018

Housing Crisis Reforms Do Not Go Far Enough Warn MPs
Chancellor Philip Hammond endeavours to ease the housing crisis needs further reforms, according to a warning issued by the Treasury Select Committee. The Stamp Duty cut in 2017 was intended to assist first-time buyers get on the property ladder, however MPs have stated that house prices are likely to increase by the same amount the chancellor intended to save.

The Treasury Select Committee has urged borrowing caps on councils to be lifted if the target of building 300,000 new homes this year is to be met. Currently, councils are limited in how much they can build due to a cap on borrowing. So far, the Chancellor has raised the limit for some councils by £1billion but only for high affordability areas. The committee is adamant that it should be abolished overall.

For the Chancellor to get anywhere near his intended goal, there needs to be greater measures put in place to increase housing supply. At this rate, 300,000 will not be achieved this year and the Government needs to demonstrate more of a commitment to the cause. Private housebuilders create approximately 150,000 per year. Without significant local authority building, the target won't be met.

The Chancellor had the best intentions to help first-time buyers and fix the housing crisis with his Autumn 2017 Budget. However, he is being warned that his ambitions are unlikely to be achieved without further action. The committee is urging the Chancellor to make a "step change" in help for first-time buyers.

Further analysis of the Chancellor's budget from the committee stated that "unfair" Retail Price Index measures used to calculate interest rates on student loans, rail fairs and air passenger duty (APD) are to be abolished. MPs are also urging the Office for Budget Responsibility to deliver a special forecast outlining the economic impact of Brexit. This is extremely important considering that Parliament will soon be voting on crucial exit laws.

The only sustainable way to improve the housing crisis and improve affordability is to greatly increase the supply of housing. The Chancellor's budget simply isn't enough on its own. The Chancellor may have had good intentions, there needs to be more effective implementation for there to be any significant progress.

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