Homebuilding will be in focus in Autumn Statement, Deutsche Bank says
The housing market and houdebuilding will continue to be in focus when the Chancellor presents his Autumn statement, Deustche Bank said in a research report sent to clients.
Acting as a backdrop, the number of new home completions in England fell 2% to about 35,000. That compared to an implicit target set out by Westminster for 1m new homes to be built by 2020, which equates to 200,000 per year and 50,000 per quarter.
The five key policies and issues in the sector identified by the broker were:
1. Help to Buy (shared equity): This product has been extended to 2020 to help finance another 120,000 new-build transactions on top of the 74,000 originally envisaged.
2. The government is expected to provide further details on its Starter home initiative which provides developers with an alternative to the current addordable requirement for Social Rent.
Westminster is targetting 200,000 such homes by 2020 which would be sold at a 20% discount to the market price - with a cap of £250,000 for the UK and £450K London.
3. Planning: It remains unclear how the government is going to go about ensuring that local authorities "use their powers to get local plans in place to "streamline the length and process of local plans”.
4. Buy to let: The Chancellor may refer to bringing Buy to Let mortgages under the MMR in April 2016.
"While we believe this to be positive in the long term, it could add to sector volatility in Q2 16," Deutsche Bank said.
5. Stamp Duty: Wholesale changes should not be expected, a few price bands around the £925,000 level might be added.
"That would encourage greater availability of homes at the top end of the market, so greater facilitating housing chains for the range of prices."