The Finance Blog

It is clear that Prime Minister Gordon Brown wishes to make the topic of housing towards the top of his political agenda. Examples of this can be found in the recent proposals to increase housing stock and encourage longer-term fixed rate mortgages.

It is clear that many of these proposals are much needed - building more homes has to be a positive move. There has long been the problem of a lack of supply in the UK housing market. Even with the new annual housing building target for 2016 from 200,000 to 240,000, many industry pundits have predicted that even with the extra figures this may not be enough to satisfy demand.

So where are all these new homes going to be built? I mean, after all we are just a small island. Many believe that the government will have no choice than to start eating into our beloved greenbelt land. It is simply not plausible to believe that there is enough space in our towns and cities to build all these new homes. On this point many believe that the government is simply echoing the voice of many would be first time buyers in order to gain support for this growing issue.

Aside from political spin, another initiative that the new Chancellor has announced is that of 20 - 25 year fixed rate mortgages. The jury seems to be out on this one however many mortgage brokers feel as though this move represents pointing the finger of blame at their industry for the present housing crisis.

Shared equity is not exactly a new idea although it has come to the forefront of the government's plans in recent times. The Prime Minister wishes to make more housing affordable through shared equity schemes. At the present time, many shared equity schemes seem to be geared solely towards key workers. Many people are put off these schemes due to confusion surrounding them - eligibility and legal issues combined.

Many of us will have heard of the Right-to-buy schemes however this is very much restricted to council housed areas. The initiative was introduced in the Thatcher years in order to provide the 'ordinary' man with the opportunity to purchase his own home. The Right-To-Buy scheme has faced its fair share of critics over the years. Today there are over 1.7 million people on the waiting list for a council property.

Many of the initiatives that have been proposed are simply old hat - seen it all before. The topic of housing is a very fiery issue and one in which will spark much emotion. There is no doubt that there needs action needs to be taken and an element of risk at the same time.

  

Tuesday, 2 September 2008