10 April, 2015
Despite calls from the National Housing Federation to address the issue regarding housing with an aim of ending the housing crisis within a generation, the reveal of the current Government's final budget earlier this month left registered providers disappointed. Although the budget did announce the Help to Buy ISA.
The Help to Buy ISA, which is due to be made available later this year, is aimed at first time buyers and sees the Government paying individuals a bonus on top of their savings when they come to purchase their first home. The ISA will allow individuals saving for a deposit to save up to £200 a month and the Government will contribute a 25% bonus on the individual's payment. This could see a person receiving £50 a month for every £200 they save. The maximum bonus available is £3,000 on savings of £12,000. The bonus can then be used towards a property worth up to £250,000 (or £450,000 in London).
It has been estimated that the new ISA scheme will cost a total £2.1 billion, which alternatively could be used to help registered providers build 69,000 affordable homes. The ISA has been described as "a sticking plaster over a gaping wound" by Campbell Robb chief executive of the housing charity Shelter. What is really needed is money being used towards the building of more homes or it is feared the housing deficit will keep expanding and the real problem is not going to be resolved.
A welcomed announcement from the budget was 20 new housing zones outside of London which expect to provide up to 34,000 new homes, although this only represents a very small proportion of what is actually required to address the current housing crisis. The housing zones are areas of land that the government will provide funding to allow for the development in return for affordable and private housing.