Last week’s Budget missed a chance to help tens of thousands of potential home buyers as the Chancellor, Jeremy Hunt, neglected to address housing and Stamp Duty issues.
Homeownership in the UK has dropped to 65% from a high of 73% in 2008. YouGov polling reveals that housing concerns outweigh education, defence, tax, and crime for the British public.
The Homeownership Funding Association (HFA) highlights the potential of alternative homeownership financing solutions from the private sector, such as Gradual Homeownership or Rent to Own.
These models could potentially add 32,500 new homeowners each year, increasing the annual rate of homeowners by approximately 9%. However, alternative funding purchases are treated as ‘multiple purchases’ and face additional stamp duty costs, which hamper their effectiveness.
The HFA calls for the Chancellor to amend the definition of a ‘financial institution’ in section 73BA of the 2003 Finance Act (2003) to include private sector providers, a change that would only require secondary legislation.
Nigel Purves, chairman of the Homeownership Funding Association, urges Jeremy Hunt MP to enter a direct dialogue to address the issue, which could lead to a significant uplift in UK homeownership.
Purves said: “As home purchase has become more and more difficult in recent years the private sector has responded with innovation that now assists would-be buyers onto the property ladder and without recourse to the taxpayer.
“However, the growing gap in UK homeownership that our members’ efforts are solving are hampered by stamp duty legislation that has not yet caught up with our solution.
“It would seem churlish for the Chancellor to ignore our plea for change in respect of genuine first-time buyers being helped to buy and in numbers that would represent a significant uplift in UK homeownership.
“We therefore call on Jeremy Hunt MP to enter a direct dialogue with us so that we may encourage him to act in what is undoubtedly a win for him as it is for potential young homeowners and their families too.”
