Chancellor George Osborne will double the housing budget to £2bn to battle the housing crisis in the UK, he announced in his Autumn Statement on 25 November. As part of the investment, amid a raft of severe cuts in the public sector, the government will help building 400,000 new houses.
Half of the new properties announced will be sold at 20% of the market value in order to help first-time buyers get on the housing ladder. Another 135,000 will be part of the government's Help to Buy: Shared Ownership scheme. Under the new rules, the restrictions to shared home ownership will be removed.
"[One] of the great social failures of our age is the failure to build enough houses," the chancellor said. "In this spending review we choose to build. Above all, we choose homes that people can buy."
In what he called the biggest house building programme by the government since the 1970s, Osborne also announced that the government will release public land to build 160,000 homes. He also plans to invest some of the money raised from tax paid by people buying their second home in helping first time buyers.
Michael Conroy Harris, construction expert at law firm Eversheds commented: "Any focus on housebuilding is naturally welcome news." However, Harris said that housebuilders, which profit from higher prices, will want to please their shareholders with high returns in the end.
"Ultimately, what we really need to see are innovative arrangements where the rewards for speed of construction outweigh the returns from limiting supply to increase demand and returns."
The chancellor also increased the stamp duty on buy-to-let houses by 3%. Although he announced that housing association tenants will be able to buy their homes in 2016, the move has been called 'distorted'.
"The Chancellor's political intention is crystal clear: he wants to choke off future investment in private properties to rent," Richard Lambert, chief executive of the National Landlords Association commented.
"The exemption for corporate investment makes this effectively an attack on the small private landlords who responded to the housing crisis by putting their own money into providing homes, by the party that they put their faith in at the election. If it's the Chancellor's intention to completely eradicate buy-to-let in the UK then it's a mystery to us why he doesn't just come out and say so."
In the capital, the chancellor promises a loan of up to 40% of the price to first time buyers. "Londoners with a 5% deposit will be able to get an interest-free loan worth up to 40% of the value of a newly-built home," Osborne said in the Autumn Statement. "My Honourable Friend for Richmond Park has been campaigning on affordable home ownership in London. Today we back him all the way."