I think it would be fair to say that this was something of a hotchpotch of ideas, a number of which – let’s be frank – were not on the agenda until very recently. Hence, we have the idea of opening up Right to Buy for housing association tenants and the ‘Bricks for benefits’ idea for working people receiving housing benefit, aiming to allow them to choose whether to pay it to a landlord or a lender.
That is a very simplified version as we await further details, but alongside these was a commitment to review the mortgage market again, particularly to look at how to turn ‘Generation Rent into Generation Buy’.
As a number of people have already pointed out, this is hardly been an issue not fully explored in recent times, and indeed we might well argue that part of what stops many first-time buyers making their first move, is the thought of what it might cost, but also whether they will actually get to the point of completion, given the large number of fall-throughs, 30 per cent, that happen each and every year.
Which first-time buyer do you know that would be happy to put up to £1,500 on the line each time they tried to purchase knowing full well that 30 per cent of all transactions are aborted, and at a time when the level of housing supply available is at such low levels that even getting to the point of offer accepted can be a real struggle?
Improving the homebuying process and leasehold reform on cards too
You might conceivably argue that one way to get more people onto the ladder is to have a process which delivers greater levels of certainty and transparency to all concerned, and which gives all parties the very best chance of working through a transaction to its conclusion.
However, while the Prime Minister may not have explicitly mentioned this in his speech, we know that there is a significant push at Department for Levelling Up, Housing and Communities level for improving the process, the greater use of upfront information, and the like. We are expecting further progress here with a strategy plan hopefully to be published before Parliament’s summer recess, which will start from 21 July.
There was however one major Conveyancing Association (CA) workstream – leasehold reform – which was mentioned by the Prime Minister and we do appear to be getting the progress we have been seeking from the government in this area.
Back in January the CA was involved in a cross-industry letter to Michael Gove, urging him and his department to implement the measures which had already been announced that would improve the lives of many leaseholders. Measures such as legislation on Leasehold Reform, reasonable fees and timescales for administrative activities, and managed freehold.
It would appear we are to get that leasehold reform in, what we hope will be, the very near future. The Prime Minister talked about a reaffirmation of its commitment to end unfair leasehold terms ‘to give leaseholders better control over their homes and lives’.
Specifically, it said will help leaseholders buy their freeholds, with ‘discounts of up to 90 per cent for those trapped with egregious, escalating ground rents’. As we’re all acutely aware there has not been a great deal of fairness in the leasehold system for a long time and leaseholders have felt like second-class citizens, so these changes and measures can’t really come quickly enough, especially as they have cross-party support, are generally non-contentious and have been discussed for what seems like an age.
It is therefore positive to see leasehold reform highlighted again, backed by the government and with a hint of what might be to come, hopefully very soon. The fight and work will go on until we get the fairness leaseholders deserve.