Housing Boom on the Way....

Sibley

Headline on Sky News.

http://news.sky.com/story/1458906/tories-pledge-1980s-style-housing-revolution




Tories Pledge 1980s-Style Housing 'Revolution'
A plan to get half a million first-time buyers onto the property ladder every year is unveiled by George Osborne.
04:28, UK,
Sunday 05 April 2015
More than 200,000 new homes are needed this year
Mr Osborne wants at least 2.4 million first-time purchases over five years


A 1980s-style housing "revolution" doubling the number of first-time buyers by 2020 has been pledged by the Tories, if they are elected.

The plan would mean half a million people a year getting their feet on the housing ladder, George Osborne said.

Labour claims Britain's chronic housing shortage is being fuelled by Coalition schemes such as Help to Buy and no action is being taken to boost supply.

Ed Miliband's party unveiled plans on Saturday to take the new ISA scheme for first-time buyers announced in the Budget and use it to finance wide-scale house building.

But Mr Osborne told the Sunday Telegraph he was determined to push even harder to open home ownership to more people.

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He said as many as one million people would enjoy direct government help to purchase properties over the next parliament.

"I think we can deliver a revolution in home ownership," the Chancellor told the newspaper.

"We want to see a massive increase in the number of people who can own their own home because home ownership is an absolutely core Conservative belief and aspiration that we support.

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"In the next parliament I would like to see over a million more people helped into home ownership by a Conservative government.

"I would like to see us double the number of first-time buyers up to half a million. That is the kind of level we saw in the 1980s. There is no reason why our country can't achieve that again.

"That's a goal we set ourselves today."


Since 2010 there have been 1.2 million first-time purchases and Mr Osborne wants at least 2.4 million more over the next five years

Shadow housing minister Emma Reynolds said: "More warm words on housing from the Chancellor will be cold comfort to the record number of young people and families priced out of home ownership over the past five years.

"Under this Tory-led government we've seen the lowest levels of housebuilding in peacetime since the 1920s and home ownership has fallen to a 30-year low.

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"Labour's Better Plan will ensure Britain builds the homes working people need.

"Labour will get at least 200,000 homes built a year by 2020, backed by a comprehensive plan - the first in a generation - and a £5bn Future Homes Fund to support the building of homes for first-time buyers."

The Tory pledge came as a YouGov poll for the Sunday Times showed the party overtaking Labour to move into a one point lead by 34% to 33%.


But Opinium research for The Observer had the Conservatives down one point on 33%, level-pegging with Labour (unchanged), while UKIP was up one point on 14%.

Liberal Democrats were down one on 7%, Greens were unchanged on 7% and the Scottish National Party were up one on 4%.

In a dramatic development on Saturday, an inquiry was ordered into the leak of a UK Government account of a private meeting between SNP leader Nicola Sturgeon and the French ambassador.

The Daily Telegraph published the diplomatic memo which suggested she had indicated that she would prefer to see Conservatives remain in power after the 7 May General Election.

Ms Sturgeon complained of a "dirty tricks" attempt to halt the party's advance.

She said it was "100% untrue" that she had expressed such a preference - a denial backed by French diplomats at the meeting.

But the memo was seized on by Labour leader Ed Miliband as a "damning revelation" of the SNP leader's true views.

C_Mababejive

What business is it of Government to interfere with the housing market? None whatsoever.

Their only job is to ensure planning regulations free up land necessary for the construction industry to build.

Houses are being used to create an overinflated asset class to be held on the books of otherwise bankrupt banks.

Why not help people to buy their first car or have their first child?

Another mystery...if 200,000 homes are built every year,where do the people come from who fill them? Are they all previously living at home with parents?

Landofwood

C_Mababejive wrote: »

Another mystery...if 200,000 homes are built every year,where do the people come from who fill them? Are they all previously living at home with parents?

I'm not sure if you're serious.

Population is growing. People are living longer while people continue to have babies, and there is net immigration.

http://www.migrationwatchuk.org/latest-immigration-statistics

Carl31

If this is the case, then they must have plans to increase supply, as even if they fiddle the demand, people can't buy houses that are not there

So surely this wouldn't be a boom? Maybe a boom in ownership numbers, but it would reduce property value in the long term? So for existing owners, isn't this a bad thing?

caronoel

I think a much bigger impetus for the housing market will be the wall of money from pensions liberation that will be pumped into btl investment.

Why get 4 or 5% on an annuity with no asset at the end when you can get a higher rental yield from property and also have an investment to hand over to your children when you die?

Thrugelmir

caronoel wrote: »

I think a much bigger impetus for the housing market will be the wall of money from pensions liberation that will be pumped into btl investment.

Why get 4 or 5% on an annuity with no asset at the end when you can get a higher rental yield from property and also have an investment to hand over to your children when you die?

Seems as most people have overlooked the tax they'd pay in releasing their pension funds. Which makes what you suggest a non starter.

Generali

Carl31 wrote: »

If this is the case, then they must have plans to increase supply, as even if they fiddle the demand, people can't buy houses that are not there

So surely this wouldn't be a boom? Maybe a boom in ownership numbers, but it would reduce property value in the long term? So for existing owners, isn't this a bad thing?

A well functioning housing market is good for everyone.

Don't forget that homeowners are also businesswomen and workers. If people are spending less on housing they can spend more on consumption boosting the businesses that homeowners own either directly or via their pensions.

chucknorris

Generali wrote: »

A well functioning housing market is good for everyone.

Don't forget that homeowners are also businesswomen and workers. If people are spending less on housing they can spend more on consumption boosting the businesses that homeowners own either directly or via their pensions.

I would love (for very selfish reasons) to see a housing boom, but I don't see it happening in London, because prices have already exceeded my hopes (never mind expectations, although they were fairly conservative). I would of course love history to prove me wrong. All I am expecting going forward (in London) is rising in line with inflation.

caronoel

Thrugelmir wrote: »

Seems as most people have overlooked the tax they'd pay in releasing their pension funds. Which makes what you suggest a non starter.

They would also have to pay income tax on the annuity income, so the after tax effect would be similar.

actually, it would be preferable under the proposed approach due to the ability to withdraw a 25% tax free lump sum

Thrugelmir

caronoel wrote: »

They would also have to pay income tax on the annuity income, so the after tax effect would be similar.

No it isn't. As tax is payable at an individuals marginal rate on the lump sum (after the tax free element). So possibly 40% or 45%.

chucknorris

caronoel wrote: »

They would also have to pay income tax on the annuity income, so the after tax effect would be similar.

actually, it would be preferable under the proposed approach due to the ability to withdraw a 25% tax free lump sum

He means when you cash in all or most of your pension in one tax year (to buy a property), which would push a lot of people into a higher marginal tax band, for that year only (rather than the tax on the rental profit).