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Will the new Cabinet rethink housing?

Posted on 2016-09-21

Theresa May has been Prime Minister for over two months now. And while it'll still take some time for her to put her own stamp on the future of the country, we thought it’d be interesting to see how May, her new Chancellor Phillip Hammond and Housing Minister Gavin Barwell aim to tackle housing and the Private Rented Sector (PRS) over the coming months and years.

Will they be sticking to the plans of their predecessors or will there be a raft of new housing policies which could affect the country’s letting agents, landlords and tenants?

New homes and housebuilding

Despite not commenting much on housing since, Theresa May did dedicate a portion of her first communications as Prime Minister to our industry.

In one early speech, she said:

“Unless we deal with the housing deficit, we will see house prices keep on rising. Young people will find it even harder to afford their own home. The divide between those who inherit wealth and those who don’t will become more pronounced.”

Thus far, there has been no indication that May’s looking to deviate from her predecessor’s main housing policies, which were confirmed shortly after last year’s General Election.

These include the Starter Homes Scheme, investment into the Build to Rent sector, the extension of the Right to Buy scheme and the introduction of a Lifetime ISA.

If May and her team do come up with new ideas to stimulate housebuilding and help more people onto the property ladder, expect them to surface in the next Autumn Statement – due for delivery in November or December.

The Help to Buy ISA

Just this month, the Government has come under fire for its Help to Buy ISA, a policy originally introduced by George Osborne in the autumn of 2015.

The savings account is designed to help first-time buyers by granting them a Government bonus towards their deposit.

According to Government statistics, over half a million prospective first-timers have already opened a Help to Buy ISA, with almost 3,000 bonuses issued in the scheme's first six months of operation.

However, the Daily Telegraph has now claimed that the savings product is misleading as buyers' 25% bonus is handed to them only after they have completed their property purchase.

Detractors, who include the National Association of Estate Agents (NAEA) and Conservative MP Sarah Wollaston, claim this defeats the object of the ISA as buyers don't get to put the bonus towards their actual deposit.

There have since been several calls for the Government to review or scrap the scheme, something that could well occur in the coming months.

New Housing Minister

Gavin Barwell, MP for Croydon Central, was appointed as Theresa May's Housing Minister towards the end of July. He takes over from Brandon Lewis, who held the role for around two years.

At the time of his appointment, Barwell said that he was looking forward to 'working with councils, housing associations, developers and investors to ensure we build the homes people need'.

However, Barwell has not been given an easy time of it in his first few weeks in the job.

An analyst for the Estates Gazette publicised the MP's voting record on housing issues, which included voting against the promotion of longer tenancies and letting agents to offer clearer information on the fees they charge.

Then, Inside Housing drew attention to a post on Barwell's website which showed that he was actively campaigning against a new homes scheme in his local area.

It will be a few months until we start to see the new minister's vision for housing and the PRS, but one thing that’s clear is that the role of Housing Minister’s still relatively low key, having not been granted full cabinet status again.

Buy-to-Let tax changes

As soon as Theresa May's appointment was announced, many of the PRS' interested parties instantly challenged the new Chancellor, Phillip Hammond, to revoke the controversial landlord tax changes announced in George Osborne's 2015 Summer Budget.

Among those to have called on the new regime to scrap the restriction of buy-to-let mortgage interest tax relief include the Residential Landlords Association (RLA) and large franchise agency Belvoir.

However, before the end of July, the Government officially released more details of the tax changes, suggesting that there will be no U-turn.

Earlier this month, we took a closer look at the proposals released by HM Revenue & Customs and you can read more about them here.

New Housing Minister Gavin Barwell may have been quiet when it comes to new homes and housing, but he has already shown an interest in the PRS.

It has been reported that Barwell is set to meet Chris Cooper and Steve Bolton - two landlords who have been campaigning for a judicial review of the tax changes - in early September.

The campaigners are due to find out if their judicial review has been granted in the middle of next month.

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