Posts Tagged ‘Housing Market Reform’

Lib Dem proposal for VAT on New Homes meets widespread resistance.

Thursday, May 27th, 2010

Nick Clegg’s call for VAT to be introduced on Newly built Homes has been met with harsh criticism from first time buyers and developers alike.

Under the Lib Dem’s pre-election plans, a tax of 5-7% would add up to £15,000 to the cost of buying the average newly built home. Moreover, this amount would likely increase as the housing market starts its recovery. With lenders demanding deposits of up to 25 per cent, the move would be a bitter blow for first time buyers already struggling to get a foot on the property ladder.

Representing 80% of the new homes built in England, the Homes Builders Federation have warned that the plans would worsen the already severe housing shortage. “The Lib Dems’ plan is an extremely poorly thought through proposal that would constrain much needed housing development still further and potentially increase the cost of housing” said Stewart Baseley, the organisation’s chief executive.

Meanwhile, Jonathan Fair, chief executive of Homes for Scotland, commented: “Any measure increasing the cost of new homes is sheer madness and will simply exacerbate the problems we as a country already face.”

With the national housing shortfall rapidly approaching the one million mark, developers have called for reductions to the regulatory costs currently imposed on housing developments, many of which rose dramatically during Labour’s time in office. Moreover, many have called for the provision of more potential sites  to be made a top priority.

The new chancellor George Osborne, is preparing an emergency budget due to be unveiled on June 22, in which he will outline the full extent of public spending cuts needed to bring down the UK’s staggering £163bn debt. In the meantime, developers have vowed to lobby the coalition government.

HIP’s Scrapped – EPC’s Here to Stay

Monday, May 24th, 2010

Following days of speculation, the Coalition government has announced that Home Information Packs are to be scrapped with immediate effect. Home sellers will no longer have to provide a home information pack (HIP), but sellers will still have to produce an official energy efficiency assessment (EPC) of their home. The move should slice around £250 off the cost of selling a home. A fully featured HIP costs in the region of £300-£400, where as their replacement, the EPC, will cost considerably less, at around £70.

The EPC has been retained largely in part due to its mandatory status under EU law. They will remain valid for ten years, unlike HIP’s which are only valid for as long as the period the property remained on the market. Nevertheless, some have pointed out that EPCs are of limited value for the majority of the UK’s older housing stock, which was constructed before energy efficiency concerns were prevalent.

First conceived in Labour’s original 1997 manifesto, HIPs were not formally introduced until August 2007. They include a range of documents including terms of sale, evidence of title deeds and the energy efficiency certificate among others. However, many in the industry see the HIP’s as needless red-tape, which has strangled the housing market. Housing minister Shapps said: ‘By suspending home information packs today, it means that home sellers will be able to get on with marketing their home without having to shell out hundreds of pounds upfront.”

The news was greeted warmly by Peter Bolton King, chief executive of the National Association of Estate Agents, who said:
‘It is also good news for sellers. They no longer need to shell out hundreds of pounds for a piece of pointless regulation that benefits no one.

However, the abolition the HIP’s is a bitter blow for up to 10,000 workers directly involved in the industry. Many, of whom have spent thousands of pounds on training to qualify, but now face unemployment.

The removal of HIP’s is the first of a number of reforms to the housing market outlined by the newly elected coalition government.