Major Market Changes : A report issued by an independent British think tank, the Resolution Foundation, suggests that the UK’s housing sector needs to be reformed so that young people today can afford to buy a home. It also shows that the choice in the lettings market does not meet demand.
The solution mentioned in the report is the introduction of indeterminate tenancies as the sole form of private rental contract available in England and Wales, following Scotland’s lead, as well as compulsory local authority registration for English landlords in line with the rest of the country. In addition, it also calls for some form of ’light’ rent control that would eventually stabilise private sector rents and limit the rise to inflation for a set three years period.
When mentioning the buying sector, the Foundation suggested that there should be a limit to future Help to Buy equity loans for those with an annual household income of less than £60,000 a year, while the stamp duty should be halved so that it supports property purchases by first time buyers and movers. Furthermore, owners of additional homes selling to a first time buyer should be given a time limited cut to capital gains tax to encourage them to do so.
Mayors of big cities should have the power to limit the sale of homes in housing hotspots to British residents. For this matter, the Foundations recommended the creation of a unit of highly skilled planners in central Government to support local authorities in areas of high housing need, and with a full five year land, to deliver high quality developments.
The report supports the growing Build to Rent sector. Reform of the viability process is suggested to ensure that builders deliver on their upfront affordable homes commitments except in exceptional circumstances and adds that allowing local authorities to raise additional money to build new homes via a property tax building precept and new borrowing flexibilities would boost the number of houses.
