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Housing opportunities in the Autumn Budget

John Phillips

October 19, 2021

John Phillips is national operations director of Just Mortgages

After the resilience the housing market has shown in the past 18 months, you could be forgiven for thinking the market is as healthy as it can be.

However, there are always areas for improvement and the Autumn Budget is a chance for Chancellor Rishi Sunak to set out a plan for solving some of the current issues.

Supply and demand

One of the biggest factors in the housing market currently is the lack of supply compared to demand. Despite the end of the stamp duty holiday, demand for properties doesn’t look to be drastically reducing.

Buyer demand has remained strong, however, the level of new housing supply coming to market has been in negative territory for the sixth month in a row so house-hunters have nowhere to go, and sales are falling.

This creates a vicious circle as sellers can’t see anything on the market to buy, so don’t want to sell, that is causing a property drought.

To solve this, there needs to be an influx of houses onto the market. Easy to say, more difficult in practice.

The UK has a target of 300,000 new properties built each year by 2025, but currently the figure is at just over 225,000. There needs to be a concerted effort to increase the number of homes built, particularly affordable homes to help meet demand.

High street revolution

One solution could be a transformation of the high street. With the shift to online retailing looking set to stay, and a number of retailers closing their physical stores, there is an opportunity to convert these vacant properties into flats and houses.

Despite the shift to remote working, there will still be those that want to live in town and city centres, with the easy access to hospitality venues, transport links and shops.

Replacing Help to Buy

Another area where the market could improve is finding a replacement for Help to Buy. Due to end in 2023, and now only available to first-time buyers, there is an opportunity now for a new scheme to support younger borrowers with smaller deposits.

The Deposit Unlock scheme, which is backed by mortgage indemnity insurance, is a good alternative to Help to Buy. It was devised by the House Builders Federation with the support of many of its house builder members and Gallagher Re, a global reinsurance broker.

So far only two lenders, Nationwide and Newcastle Building Society, have launched mortgage products to support Deposit Unlock but there are around 20 looking into it.

Shared ownership is another option. Currently the scheme is a small part of the market, but it looks set to grow.

More shared ownership properties are going to be built as part of the government’s Affordable Homes Programme for 2021-26. This will see the new build sector receive an injection of £8.6bn to deliver around 119,000 affordable homes, including 57,000 for home ownership with the majority of these being shared ownership.

The housing market has certainly proved its resilience, with record numbers of transactions through the pandemic. With activity now returning closer to normal, there is now an opportunity to put in place policies that will ensure the market continues to go from strength to strength.


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