Martin Walshe, Head of New Homes, Cheffins comments:
“Scrapping stamp duty for first time buyers up to £300,000 is a welcome move for those struggling to get onto the housing ladder. Any help we can give to first time buyers to alleviate the burden of finding high deposits as well as footing the bills for all other moving costs should be considered. The issue in the main however, is the actual pricing of homes coupled with the severe lack of affordable property and unfortunately cutting stamp duty cannot help that.
It is clear that stamp duty is a golden goose for the government and of course there is going to be an unwillingness to cut stamp duty receipts too much, however, the suggestion that profits will be used to help fund affordable housing and boost schemes such as help to buy cannot be argued with. Stamp duty has affected all sectors of the market and has caused transactions to fall across the board. Probably the most noticeable effect has been on the middle and prime markets and this should be addressed if Philip Hammond wants to kick-start the housing market. Increased activity in the upper and middle markets ought to have a knock-on effect, increasing transactions and freeing up property at all price points.
To rebalance the supply vs demand equation and fill the deficit of homes to a level where prices will be readjusted will take years. The promise of a £44 billion investment for the housing market and increased freedom for housing associations to build more homes ought to help with delivery, but the proof will be in the pudding as to how many new homes are created for first time buyers. The government has increased the housing budget to deliver 300,000 more homes with a large swathe of affordable properties within in the mix. However, housebuilding targets have not been met by successive governments for decades and the reality is that the market needs to provide the right homes in the right places at prices which people can genuinely afford.
On a macro level, the question here really is whether the Housing Association model works when it comes to affordability. There needs to be an element of analysis and accountability held against these promises which will need to be reviewed on a regular basis. Whilst public sector land has been released and there are new financing options and support for small and medium housebuilders, these need to work hand-in-hand with local governments and councils to ensure the delivery of the homes which are so desperately needed. Focus will be on urban and brownfield sites, which is welcomed in protection of the Green Belt.
From a Cambridge perspective, there are currently over 68,000 homes in the pipeline for the region within a 20 mile radius of the city, however we are suffering with an affordability issue. As a city we are providing above average numbers of new properties but the majority of these are not in affordable price brackets for our younger generations. We have seen a plethora of high value new homes in the largest edge-of-city developments, however these are now seeing reducing prices as demand is not reaching the levels of supply from previous years. House prices in general in the city are 13.5 times higher than earnings, making Cambridge unaffordable for many. As always infrastructure continues to be the element which lets Cambridge down so if we are going to provide out of town or edge of city developments, we need to factor in how to reduce congestion and how to support better transport options. The proposed underground line is said to bring the potential for around 50,000 new homes along the corridor into the city centre. This would open up villages south and east of Cambridge, such as Teversham, Fulbourn, Bottisham, Linton and so on and would make these locations increasingly desirable. Towns such as Newmarket and Haverhill would also benefit hugely as the new line could hopefully improve accessibility from those locations into the city centre. This will have a knock-on effect on house prices in these areas which have always been priced at lower levels than Cambridge.”
Philip Woolner, joint Managing Partner and Head of Commercial, Cheffins, comments: “The plan to develop the so-called ‘brain belt’ between Oxford, Cambridge and Milton Keynes will further ignite the UK’s burgeoning R+D sector and help to increase sharing of knowledge and talent between the two cities. Additionally, this plan will unlock a number of potential sites in between the two ancient university towns and will help with the development of the Golden Triangle which has set pulses racing in government for the past few years. The plan to deliver over one million homes throughout this swathe of central England will be met with open arms as Cambridge and the surrounding region has continued to create jobs and employment but not delivered on homes for this growing population. It is incredible that the proposed Oxford-Cambridge expressway/east-west rail link hasn’t happened earlier, as connections between these two scientific hubs have been less than satisfactory for decades. Concentration for years has been based around improving connectivity to and from London, this is the first time that growth from east-west has been put at centre stage.
Infrastructure will be crucially important in allowing the UK to realise the potential of all sites throughout the nation and to make them accessible. There is ground to be made up, particularly in the Oxford-Cambridge arc and this needs to be expedited for our home-grown industries to be taken seriously on a global stage. On a more local level, developing this area of the country will help to unlock industry in towns such as Bedford and Northampton which will benefit exponentially from improved access to Oxford and Cambridge. Cambridge has been one of the world’s biggest success stories, growing at a phenomenal rate and creating some of the world’s most incredible breakthroughs in science and technology and if we want our city to continue to prosper, we have to accept the levels of development planned.”
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