First-time buyers get help with 500,000 new homes
By Jill Sherman and Jenny Davey
Daily Telegraph Dec 05 2005
JOHN PRESCOTT yesterday announced ambitious plans to build an extra 500,000 homes in the next decade in order to help first-time buyers.
The Deputy Prime Minister also proposed an overhaul of planning laws, including a windfall tax for landowners and incentives for local councils to put more brownfield sites up for development.
New measures to help first- time buyers were also detailed. Homebuyers would only have to find 75 per cent of the property’s asking price, with the Government and mortgage lenders splitting the remainder equally between them.
Halifax, Britain’s biggest mortgage lender, the Nationwide Building Society and the Yorkshire Building Society have already signed up to the scheme, which should be available from next October.
The scheme will be open to key workers, social tenants, those on the housing register and other first-time buyers identified as priorities by regional housing boards in England and Wales.
In the Government’s response to the Barker report on housing, Mr Prescott announced a new target of 50,000 extra homes a year till 2016 — a 33 per cent increase on current levels.
Although less than the number proposed by Ms Barker, the plan was welcomed by housebuilders and organisations representing the homeless. But Mr Prescott faces intense opposition in the South and East of England, where the public is resisting plans for new developments in densely populated areas.
Rural campaigners said that it would inevitably result in more greenfield sites being developed. Mr Prescott also launched a number of pilot schemes to encourage local councils to bring derelict sites back into use and to identify disused hospital and military land.
Property developers and landowners complained about Gordon Brown’s plans to levy a windfall tax on the profits gained after selling land with planning permission last night.
The move, which was disclosed in The Times last week, is expected to raise about £500 million, which would be recouped by the Treasury. Most would be redistributed back to councils, probably in proportion to land sales. The tax is expected to be between 20 to 25 per cent of profits and would be invested locally in infrastructure, such as new roads, hospitals and schools.
Critics claimed that the tax, which would be introduced after consultation in 2008, would stifle new development and hit farmers badly.
Stuart Robinson, the head of planning at CB Richard Ellis, said: “The whole concept of the planning gain supplement is utter madness. The problem with the housing market, as we were told by Kate Barker and the Chancellor, is that there is insufficient supply and the prices are unaffordable. So why introduce a measure that will act as a deterrent to developers and which will increase the costs of production?”
Mike Harrison, a partner in the landed-estates group at accountants Saffery Champness, said: “This land tax will be another nail in the coffin for farmers. Poor profitability and the delay in single-farm payments until next spring has put many farmers under severe cash-flow pressure this year, but diversification has offered an alternative income stream.”
Mr Brown also announced a new scheme to allow savers to invest in houses, office blocks and shopping centres, by approving the introduction of new tax-efficient property investment vehicles. The new real estate investment trusts are intended to boost investment in the private, rented residential and affordable housing sectors, and to increase the quality and supply of commercial buildings for businesses. The trusts will also offer savers a way to invest in property free from the dangers associated with buy-to-let investments. Liz Peace, chief executive of the British Property Federation, said: “We are extremely pleased with the news, but the devil will be in the detail.”
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