The Housing, Communities and Local Government (HCLG)
Committee has today launched a new inquiry examining
barriers to first-time buyers, especially those on lower incomes,
owning their own homes.
The cross-party Committee will be looking at how the Government
supports first-time buyers through reliefs, such as for stamp
duty land tax, and financial products, such as special ISAs and
mortgages. It will explore how these could be improved to help
people get on the housing ladder.
The Committee's inquiry is also likely to examine the plans
announced by the Chancellor this week, including the creation of
a permanent mortgage guarantee scheme and a review of Financial
Conduct Authority lending rules which could allow a prospective
buyers' record of paying rent on time to show they can afford
mortgage repayments.
The Committee's inquiry will be examining home ownership in
England.
The inquiry will also be exploring existing routes to affordable
home ownership delivered by the Affordable Homes Programme,
including Shared Ownership, and how far these provide genuinely
affordable routes to owning homes.
The Committee is also likely to scrutinise the impact of proposed
changes to the Right to Buy scheme on the ability of social
housing tenants to own their home.
The inquiry's full terms of reference are included further below.
, Chair of
the Housing, Communities and Local
Government (HCLG) Committee said: “Decades of
failure to build anything like the homes we need means that far
too many people stand no chance of making the first step on the
housing ladder. If you don't own your own home, and can't turn to
your family for help, how can you be expected to save up for a
mortgage when more and more of your income is going on rent?
“Ultimately, it's crucial that more homes are built, and that the
Government deliver on its 1.5m new homes target in this
Parliament. But, when the prospect of owning a home is so slim
for too many people, it is important that we examine the routes
to affordable home ownership and how the Government could help
foster better support for first time buyers.”
The average home in England cost seven times average earnings in
2014, according to the ONS. Affordability worsened to nine times
earnings in 2021, although it has since improved to 8.25 times in
2023.
Public evidence sessions for the inquiry are expected to commence
in October. Details will be confirmed and announced in due
course, but the Committee is likely to hear from witnesses
including major mortgage providers, home builders and developers,
councils, and residential, rental sector, and leaseholder groups,
and the MHCLG Minister.
Terms of reference – Affordability of home
ownership
The Committee welcomes written
evidence on the terms of reference outlined below. The
closing date for submissions is Friday 29 August.
- What are the main barriers first
time buyers face to owning their own homes, particularly those on
lower incomes?
- What policy options are available
to the Government to support first time buyers to get onto the
housing ladder?
- To what extent will increases in
housing supply improve housing affordability for first-time
buyers?
- Will the creation of a permanent
mortgage guarantee scheme and increased availability of high
loan-to-value mortgage products improve affordability for buyers?
- What are the barriers to moving to
a system whereby prospective buyers' record of paying rent on
time is considered as part of a mortgage application?
- How effective are financial
products, such as special ISAs and mortgage products, at helping
people get on the housing ladder, and how can they be
improved?
- Are current reliefs on stamp duty
land tax sufficient to support first-time buyers to purchase
their first homes?
- What can the Government do to
support first-time buyers with the costs of the home-buying
process itself, for example fees paid to conveyancers and estate
agents?
- What impacts will recent and
proposed changes to the Right to Buy scheme have on the ability
of social housing tenants to own their home?
- Do existing routes to affordable
home ownership such as Shared Ownership, provide genuinely
affordable routes to owning homes, and how could they be improved
in the new Social and Affordable Homes Programme?
- What impact will the provisions of
upcoming legislation, including the Renters' Rights Bill and the
Draft Leasehold and Commonhold Reform Bill, have on the
affordability of homes for first-time buyers?
