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Govt announces housing market boost

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A new strategy to increase the number of affordable homes in the UK and help first-time buyers to get on the property ladder has been created by the government.

The white paper unveiled by communities secretary Sajid Javid has three main aims: to ensure the right homes are built in the right places, to speed up house building, and to help diversify the property market.

Under the slogan “let’s get Britain building”, Mr Javid said the government intends to ensure that new homes are being built in the places where people want to live.

Lifetime ISA

One of the key features of the white paper is the creation of a new Lifetime ISA, which is designed to help young people to simultaneously save for a deposit on a house as well as their retirement without having to choose one over the other.

From April 2017, people under the age of 40 will be able to open a Lifetime ISA and contribute up to £4,000 in each tax year, with the government providing a 25 per cent bonus on these contributions at the end of the tax year.

It means that people who save the maximum each year will receive a £1,000 annual bonus from the government, with savers able to make contributions and receive a bonus from the age of 18 up to 50.

It means that over their lifetime, savers will be able to have contributions of £128,000 matched by the government for a maximum bonus of £32,000, with investment growth on both their contributions and the government bonus.

Further measures

The government has also announced it is to consult on measures to reduce the number of properties left standing empty, while an extra £1.4 billion announced in the Chancellor's Autumn Statement will boost the Affordable Homes Programme and other initiatives such as Rent to Buy.

Councils are also to be given greater powers to speed up the building of new homes, and to ensure that developments are created where they are most needed.

At the same time, local authorities will be encouraged to do more to eliminate other obstacles facing developers and housebuilders, including standardising the assessment of future housing needs.

Increasing land supply will be key to achieving this, according to the communities secretary, who stated: “It doesn’t matter how many planning decisions you make, you’ve got to start off with the right amount of land.

“If you’re not making enough land available then you’re not going to get the massive increase in supply that we want to see.”

A further measure will see existing funding streams used to encourage innovative construction techniques and off-site production as part of a push to attract more builders into the sector.

Housing market gains

It comes as the latest Halifax House Price Index revealed that property prices rose by 5.7 per cent in the year January 31, with the typical home now valued at £220,260.

According to Halifax, the trend will continue throughout the rest of 2017, with steady increases in house prices being observed compared to some of the sharp movement witnessed over the past two years.

The report also revealed growth in the number of people entering the property market, with the amount of first-time buyers rising by seven per cent across 2016 to reach 335,750, as customers took advantage of record-breaking mortgage deals across a range of terms.

Use our mortgage calculator, created with the Mortgage Advice Bureau, to work out the best deal for you.