Having already reviewed what small businesses hope to see from each of the three major political parties, now the focus shifts to consumers, exploring the challenges faced by British homebuyers and savers.
The UK property market has seen a dramatic recovery over the past year, with the government’s Help to Buy scheme playing a large role in supporting over 14,600 first time buyers onto the property ladder, according to Treasury data. However, with the Office for National Statistics reporting property prices grew 11.7 per cent in the year to July, experts are beginning to fear many homebuyers may soon be priced out of the market.
This brings the tiered stamp duty system into question, since the average property value now exceeds the threshold limit for the lower stamp duty bracket, forcing the majority of buyers to pay 3 per cent or more. Alongside creating a major barrier for first-time buyers, this also dissuades homeowners from upsizing, limiting mobility in the housing market and restricting the supply of affordable first homes.
While housing demand may have surged, supply has failed to keep pace, fuelling price growth. As a result, boosting house-building activity remains a key priority for the UK government, and homebuyers will be looking for action to address supply side issues, including initiatives to reduce red tape on new developments.
“Political parties of all colours have made the right noises on the need for more homes, but without serious action the ambition to own a home will become more and more out of reach to ordinary people,” reflects Katja Hall, CBI Director General.
Incentives for young savers
The Money Advice Service recently discovered that 33 per cent of the adult population in the UK have no form of savings and are failing to adequately prepare for the future. In particular, a combination of rising living costs and low interest rates have dissuaded the younger generation from saving, with Tony Dolphin, Chief Economist at the Institute for Public Policy Research, commenting:
“Very few young people have the reserves they would need. We need new ways of helping young people build up their assets.”
To tackle this looming problem, The Centre for Policy Studies are calling for a new Lifetime ISA scheme, supported by matched contributions from government, to encourage saving from an early age.
Follow Aldermore on Twitter over the next three weeks for live updates on how each of the three main political parties intends to address these issues for British homebuyers and savers.
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