UK Finance, representing over 300 mortgage lenders and financial services firms, is advocating for a fundamental reform of the UK housing market. The organization has outlined several key areas where significant changes are needed to address the ongoing housing crisis and support various segments of the housing market.
In a recent statement, UK Finance has called on the newly elected Labour government to collaborate on the following reforms:
Enhancing Home Ownership
Stamp Duty Adjustments: UK Finance proposes making the temporary nil-rate bands on stamp duty up to £425,000 permanent. This measure is intended to ease the burden on first-time buyers.
Expanded Access to Shared Ownership: Increasing opportunities for first-time buyers to enter the property market through shared ownership schemes.
Review of Prudential Rules: Assessing whether the existing prudential regulations, implemented post-global financial crisis, are overly restrictive and hindering mortgage accessibility for potential borrowers.
Supporting Older Homeowners
Independent Advice Services: Establishing services to guide older homeowners in addressing their housing needs and reducing upfront costs associated with downsizing, including potential stamp duty exemptions.
Age-Friendly Housing Targets: Ensuring that the government’s housing targets include homes that are suitable for older buyers and located in desirable areas.
Revamping Home-Building
Simplified Planning System: Advocating for a more streamlined, rules-based planning system to accelerate development times and provide consistency in planning decisions. This is aimed at helping developers meet the government’s new homes targets.
Strengthening the Rental Market
Annual Review of Local Housing Allowance: Updating the Local Housing Allowance annually to reflect current rent levels.
Registration System for Rental Properties: Implementing a government-sponsored registration system for rental properties to aid compliance and identify sub-standard properties and rogue landlords. Additionally, offering tax incentives for green upgrades to rental properties could encourage improvements.
Charles Roe, Director of Mortgages at UK Finance, emphasized the urgency of addressing the housing shortfall: “Everyone needs a safe, secure, and affordable home. We support the government’s efforts to tackle this issue swiftly and comprehensively.”
Roe further highlighted the report’s recommendations, which aim to simplify the planning process, remove barriers for first-time buyers, and meet the housing needs of the ageing population. He also underscored the importance of improving standards in both the private rental sector and the social and affordable rental sectors to ensure broader housing market stability and accessibility.
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