The rabbit I hope Healey pulls from his hat – Pierson

Reports that household income caps are expected to be £110,000 outside London and £140,000 in the capital, rather than the £90,000 and £110,000 previously anticipated, are welcome. But property price caps must also reflect regional housing market dynamics, or the scheme could turn out to be a missed opportunity altogether. 

Where you live will determine your access to the scheme, whether you’re a buyer or a builder. 

We don’t yet know what the price caps will be, but given how wrong the government got it last time, I’m not too hopeful they’ll be workable. 

Most builders struggled to build homes under the caps after they were introduced in 2021, while some sites had none at all because they couldn’t be built cheaply enough to fit the criteria. 

In a letter from the London Chamber of Commerce and Industry (LCCI), published in the Telegraph, the industry body criticised the scheme as being “designed for Manchester, not the whole country”. I’m inclined to agree. 

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And, while they could restrict stock, the price cap levels could also impact the speed of delivery. 

While some builders may be able to carry out a site redesign to accommodate homes within the price caps if they’re set below the prices of the homes they had planned to build, that takes time and costs money. 

But those who have already laid foundations for homes above the price cap will have no replan option and will be shut out of the scheme entirely. 

Caps must reflect how first-time buyers live today 

Beyond the practical issue, property price caps raise an ethical consideration. 

Who gets to decide what a first-time buyer needs from their first home? 

If the caps are set too low, it proves the government has an outdated view of what modern families need from their first home. The starter home, often a flat or two-bed house, is no longer feasible for many first-time buyers. Flats have a bad rep these days, and the traditional starter home is often just too small. 

First-time buyers are older, so they’re more likely to have a family. One or both parents could work from home, so office space is essential. And moving to a larger home from the get-go is a future-proofing measure to avoid paying stamp duty several times over. 

Restricting YFH properties to small apartments or houses that buyers will soon have to leave, before they’ve risen much in value, is morally wrong. 

Higher income caps would open the scheme to more working households. But that will mean little to buyers who qualify on earnings if the property price caps exclude the homes they need. 

I’m not trying to be a doom-monger – both housebuilders and first-time buyers have been crying out for support. But if we’re not careful, we could see a North/South divide in reverse. 

The scheme, as the LCCI says, could serve northern cities like Manchester well, but if property price caps are too restrictive, it could still be almost useless for first-time buyers living in London and the South East. 

Chancellors are famed for pulling a ‘rabbit out of the hat’ at the closing stage of the Budget, but said rabbits have been sadly missing in recent years. 

If Mr Healey plans to pull a rabbit out of his hat this year, please let it be some common sense property price caps to make this scheme a success.