David Cameron’s government is going to take “radical” steps to intervene in Britain’s housing market, and to try to reduce the chronic undersupply of affordable housing that is plaguing potential housebuyers in the UK right now.
On Monday, Cameron will announce plans to commission tens of thousands of new so-called “starter homes” on brown field sites across the UK, aimed at getting more people on the property ladder, as well as stopping the spiralling growth of house prices that has pushed the average cost of a British home to nearly £300,000, according to the ONS.
There are a whole load of new measures in the government’s plans, but some of the most important ones include:
- Building 13,000 new homes on four sites outside London in 2016 — 40% of these houses will be considered affordable “starter” homes.
- The sites are spread across the south-east, with one in Kent, one in Cambridgeshire, one in Sussex, and one in Hampshire.
- A similar approach will then be taken in Old Oak Common, north west London, once the first wave of homes is completed.
- The government will also create a £1.2 billion ($1.77 billion) “starter home fund”, designed to allow at least 30,000 new starter homes, and 30,000 so-called market homes, to be developed on 500 brownfield sites across Britain.
In a statement released along with the announcement, Cameron said: “Nothing is more important to achieving that than ensuring hard-working people can buy affordable homes. Today’s package signals a huge shift in government policy. Nothing like this has been done on this scale in three decades — government rolling its sleeves up and directly getting homes built.
“Backed up with a further £1.2 billion to get homes built on brownfield sites, it shows we will do everything we can to get Britain building and let more people have the security that comes with a home of their own.”
In the announcement, the government also compared itself to the Tory leadership of Margaret Thatcher, saying that no government has made such a significant intervention in the affordable housing market since her and fellow Tory politician Michael Heseltine regenerated the East End’s Docklands in the late 1980s.
The government is clearly pretty excited by the new move, and in its statement referred to the changes as “radical,” “ground-breaking,” and “a huge shift in government policy”.
Britain’s housing market is undeniably crazy right now, prices have been rising sharply for years, and generally speaking, people don’t expect things to get much better any time soon. In November, Simon Rubinsohn, the chief economist at RICS, one of Britain’s biggest housing bodies, said that “property is set to become even more unaffordable going forward”.
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