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18/03/2015

Osborne announces Help to Buy first-time buyers ISA

Words: Laura Edgar

Chancellor George Osborne has announced in the 2015 Budget that first-time home buyers will receive a government contribution for every £200 saved.

Other measures announced include devolution steps towards creating a 'Northern Powerhouse'. Greater Manchester Councils will be able to keep 100 per cent of their business rates, while Cambridge received a similar deal.

Osborne said: “We have now reached provisional agreement to allow Greater Manchester to keep 100 per cent of the additional growth in local business rates as we build up the Northern Powerhouse.”

The Chancellor also declared a West Yorkshire Combined Authority 'devolution deal', which would give the region more powers over investment decision on skills, housing, transport and business support.

It was also announced that first-time buyers will receive help to save for a deposit. For every £200 first-time buyers save in an ISA, “the government will top it up with £50 more”.

Surplus public sector and brownfield land will be mapped to identify whether it is appropriate for development, while consultation into compulsory purchase orders was announced.

The Chancellor announced the government will look at how improving housing can help people with care needs stay in their homes longer and therefore reduce costs to the NHS.

Mayor of London Boris Johnson will receive new powers over skills and planning to help accelerate housing development. London will also receive new investment in transport and regeneration, along with sizeable transport deals for the North and the South West.

Osborne committed £60 million to the West Midlands’ Energy Research Accelerator, in which six universities will take part – Warwick, Birmingham, Aston, Nottingham, Loughborough and Leicester. The hub will build on the expertise of these universities, the British Geological Survey and the surrounding industrial base to deliver a step change in energy R&D.

Up to £600 million to clear new spectrum bands for auction to improve mobile networks, including a commitment to deliver ultra-fast broadband to all homes, was put forward.

Osborne said the south-west of England will receive a new inter-city rail franchise, the toll for Severn River crossings will be reduced from 2018 and consultation on Swansea Bay tidal lagoon will get underway.


Reaction

“We welcome in principle new measures to boost housing and regeneration but will need to see the detail of what is proposed and how they are to be delivered. It is crucial that we begin to invest again in local planning for a growing and sustainable economy. The National Audit Office revealed a huge 46 per cent reduction in spending on planning and development services. This highlights very clearly the need to channel more resources into the planning system at local authority level.”

Janet Askew, president of the RTPI


“The fact that national planning initiatives or construction barely featured in today’s statement is perhaps an indication that the chancellor has run out of ideas. Our housing crisis has profound social and economic implications and more needs to be done to enable delivery of the new homes desperately required. Likewise, further devolution of powers and a shot in the arm for major infrastructure schemes are welcome, but we cannot look at these regional initiatives in isolation.

“What is required is a national strategic plan that sets a proper direction for how to accommodate our growth needs. This would enable schemes to be considered in the context of a 20-year delivery strategy combined with a proper acknowledgement from government that building on some of the less valuable green belt land is required if we are to properly tackle the housing deficit. The next government, whoever it may be, must make the hard decisions required to get the country moving and properly tackle our housing deficit.”

Andrew Gale, director, Iceni Projects


“Allowing cities to retain the proceeds of growth from new development is a vital tool for local authorities. These pilots will give them the freedom to provide the local infrastructure improvements necessary to encourage development to take place, and will allow them to take a properly strategic view of how they grow their economies.

Melanie Leech, chief executive, British Property Federation


“The ISA is a very positive move as it will encourage and assist people to save for a new home- and is something we have long called for. Allowing people to achieve their ambition of home ownership more quickly will assist maintain demand for new build homes, and in turn allow builders to increase build rates.”

Home Builders Federation, speaking to The Planner


“There was much for the property industry to welcome in this Budget, especially the emphasis on growth in cities and urban areas, but as ever, the devil will be in the detail that emerges over the coming days.

“A comprehensive transport strategy for the North is critically needed. It will be interesting to see whether other cities follow suit on being able to keep the uplift in business rates – will it just be those authorities that need the money and development or will places with growing economies and high housing demand also take up the opportunity?

Claire Kent, director at Barton Willmore’s Leeds office


“While it could have gone further by committing even more to the projects set out in the National Infrastructure Plan, the government is showing signs of the kind of commitment to infrastructure which industry bodies have been looking for.

“The big ticket items are transport (across the country), digital communications networks, and energy (tidal lagoons), as well as in the oil and gas arena. The tidal lagoon piece is exploratory, to see whether the Swansea project is affordable and gives value for money, so this is a really significant test case for the whole industry.”

James Parker, associate director at Berwin Leighton Paisner


“The commitment to ensuring that growth was distributed across the country, but not at the extent of London, represented a central theme to the Budget with the emphasis on a continuation of devolution of powers to the regions. The chancellor, with reference to the Northern Powerhouse, called the agreement with Greater Manchester on an elected mayor 'the most exciting development in civic leadership for a generation'.

“The chancellor has evidently seen the positive political gains to be achieved from establishing a geographic focus with a new City Deal with the West Yorkshire combined authority also announced alongside a focus on investment announcements in the South-West region.

“Whilst there is cross-party recognition of a ‘housing crisis’, the Budget set out a limited number of new announcements. The one that will inevitably receive most media coverage will be the Help to Buy ISA. This is evidently intended to build on the success of the current Help to Buy initiative. The extent to which this will fundamentally address a long-standing need to deliver housing is, however, limited.”

Antony Pollard, director of Economics, Turley


“The Centre for Cities welcomes the chancellor’s continued focus on growing the UK’s city economies – including within Scotland and Wales – and the role that city-level investment in the fundamentals of housing, transport, infrastructure and innovation can play in building a more sustainable national recovery. Ultimately, this was a Budget that reflected the progress made on urban policy and city devolution across the political spectrum over the past year. But it also made clear that there remains much to be done before policy-making matches the rhetoric of change.

“Housing was a particular disappointment: given the significance of the threat the chronic ongoing under-supply of housing poses to the economies of some of our best-performing cities, this Budget is most notable for what wasn’t said on the subject. There were ultimately no announcements that would suggest the UK can get anywhere near the kind of scale of house building we need to see to improve affordability – and indeed, the Help to Buy ISA could increase demand further, and without a complementary increase in supply, it is unlikely to provide any kind of reprieve to the housing crisis for young and old alike.

Centre for Cities


“Devolving planning powers to the London Mayor will go some way to addressing London’s critical shortage of housing supply. There is a growing consensus that lack of space isn’t the biggest issue to the delivery of housing, but the complexities of the planning system. Anything that contributes to cutting a lot of the red tape associated with the capital’s more complex sites is likely to be welcomed by the development community”.

Chad Sutton, planning partner at Maples Teesdale


“We also welcome the announcement that surplus public sector and brownfield land will be mapped to identify whether it is appropriate for development. Alongside strategic sites, small-scale, infill sites can make an important contribution to increasing housing supply.”

Luke Burroughs, Campaign to Protect Rural England


“It is great to see the scale of job creation in the North West - clearly an emphasis going forward will be on developing business and industry in the North, with an exciting opportunity for Greater Manchester to retain a greater proportion of business rates. However the challenge will be in maintaining the supply of high quality industrial locations and matching potential jobs growth with the growth in housing, transport capacity and community infrastructure needs.”

Peter Tooher, director of planning and regeneration, Nexus Planning, Manchester office


“Whilst we welcome the Chancellor’s recognition of London and the Northern Hub as powerhouses for the UK’s sustained recovery, the Budget does not go far enough. Only detail around the transport, healthcare and technology headlines for the Northern Hub will reveal whether this is an acceleration of the 2014 National Infrastructure Plan.
 
“We urge the government to encourage UK businesses to lead on delivering UK infrastructure projects, equipping them to take advantage of the huge export potential around the world. Ring-fencing delivery plans to speed skills development and mapping required skills against the planned pipeline of projects would enable UK business to better compete on the global stage. Otherwise British firms may lose out to international consortia and be reduced to taking tier-two roles.”

John Hicks, the UK head of government & public at AECOM


“We welcome the Government’s commitment in today’s Budget to look at improving housing to help people with care needs remain independent in their homes for longer. Urgent action is needed to create more disabled-friendly homes as our recent research shows that currently over 300,000 disabled people in the UK are on housing waiting lists and living in severe discomfort because their homes are not suitable for their needs.
“We will be seeking more detail on this proposal and look forward to working with the Government to support it.”

Leonard Cheshire Disability


“Any measures to support house building and infrastructure are of course welcome, and whilst today’s Budget announcement mentions important new regional initiatives, most notably in the South West and the North, these must be seen only as a starting point for further investment. The real issue this country faces is delivery, specifically the capacity of the construction industry and its supply chain to deliver on projects. Unless we attract increasing numbers of the best and the brightest people to the construction industry and built environment then supply will always struggle to match demand.
 
“We need cross-party support not only for more housing and infrastructure but also for developing the UK workforce with the skills to build these projects.“

Mark Naysmith, WSP, Parsons Brinckerhoff UK COO and managing director of property, transportation and infrastructure

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