Shapps: 'Powerful incentives not meaningless targets key to building more homes'

Published by Jon Land for 24dash.com in Housing

The Government today promised to help people trying to get on the property ladder by boosting the number of new homes being built.

Housing Minister Grant Shapps said "powerful incentives" would be introduced to replace the "meaningless targets" put in place by the previous government to increase housebuilding rates.

He said instead of being told what to build and where, local residents would be able to develop their own vision for their community, with Local Housing Trusts set up to oversee the building of new homes.

He added that incentives would also create direct benefits for local communities, bringing jobs and investment, as well as more homes, to their area.

Mr Shapps said the coalition Government had also agreed to promote shared ownership schemes and help social housing tenants to buy or part-buy their homes.

He said: "I am simply saying to those who aspire to own their own home: this Government will support you, you will not be ignored. The age of aspiration is back."

At an event hosted by the Royal Institution of Chartered Surveyors, he said there were an estimated 1.4 million households who aspired to owning a property but were unable to do so because of house prices and mortgage availability.

He added that the average age of a first-time buyer who did not receive help from their family was now 37.

Mr Shapps called on mortgage lenders to support creditworthy borrowers.

He said: "There is a risk that the market may not respond to changing conditions quickly enough, leaving creditworthy borrowers still out in the cold."

But he added that responsible lending and responsible borrowing were "two sides of the same coin", and consumers would also have to show that they could sustain home ownership.

Mr Shapps also called on groups involved in the housing market, including builders, surveyors, lenders and estate agents, to work together to ensure that the conditions which created housing bubbles in the past were never repeated.

He said: "Falling prices are bad for homeowners and builders alike, whilst soaring prices freeze out first-time buyers.

"So, we need to build more homes and entrench sensible lending practices so that, in the long run, houses will become more affordable."

David Bexon, Managing Director of SmartNewHomes.com, said: “Grant Shapps’ commitment to increasing home ownership will inject much-needed momentum into the housebuilding industry’s recovery and is something we have been campaigning for.

"Off the back of today’s announcement, I would hope to see increased levels of lending from the banks, in particular for new build properties which have suffered from excessive lending restrictions, as well as an up-turn in the number of first time-buyers able to enter the market.

“The public and housebuilding industry will be hoping that today’s announcement acts as a precedent for the new government’s long term plans, however, we are still yet to hear how development levels will be sustained under the coalition’s localism policy - something which remains the biggest threat to recovery.”

Daniel Fitzpatrick a solicitor in the Housing team at Hodge Jones & Allen LLP, said: “Although investment in housing is always welcome, I would be concerned that this scheme is seen as an alternative to social housing.

"There is great demand for more social housing to be built and it looks like the government is trying to use this scheme as an alternative. The poor and the vulnerable would not benefit.

"For example, the right to buy your home as a social housing tenant is a popular scheme.

"However, it must be balanced with further investment in new social housing; otherwise the limited number of properties continues to diminish.”

The Chartered Institute of Housing (CIH) welcomed the call for responsible mortgage lending and borrowing and a move towards more sustainable home ownership.  

However, it cautioned that there is a need for a balanced housing market with affordable options to buy or rent a home and that for a significant proportion of the population renting is an attractive long term housing option.

The CIH said the Minister's plans to replace targets with incentives to build more homes have raised some concerns in the sector about their immediate impact, but as a long term strategy it could fundamentally change housing delivery and perceptions of new building.

CIH Director of Policy and Practice Richard Capie said: "We are pleased that the Minister wants to incentivise and encourage local communities to support new building, and we look forward to working with him to ensure that his policy can be delivered on the ground."

Ian Baker, Group Managing Director for Housebuilding at Galliford Try Homes, said: "We are greatly encouraged by Grant Shapps’ latest statement confirming a commitment to encouraging homeownership and the building of more homes.

"He is right to question the banks’ reluctance to lend to people who can afford to pay back mortgages and we add to the call for ongoing restrictions to mortgage lending to be lifted.

“Tackling the long standing issues of planning red tape and approaching the new localism policies with some caution is also welcomed and we look forward to the content of his policy statement.

"This must, however, be very clear in the detail so that local authorities can gear up to provide housebuilders with a mandate to deliver housing and convey a fair and accurate picture of the need for new homes at a local level. The worst case scenario would be a shift towards Nimbyism for Nimbyism sake.

“Mr Shapps’ further commitment to HomeBuy Direct schemes which encourages first-time buyers is welcomed. However, he must also not lose sight of the benefits that the housebuilding industry brings to the economy as a whole, providing housing and employment across many different associated sectors.”