2024 Spring Budget Boost for Affordable Housing

Charlie Lamdin thinks the budget was great news for the housing market

The lack of help for first time buyers or other government stimulus is the best thing that could have happened.

What goes up, must come down. Except house prices, it would seem.

The chances of buying a home have continued to escape more and more would-be home buyers. The average age of a first time buyer continues to climb. The earnings-to-house-price ratio is at it’s highest/worst in over 100 years, and that’s even after allowing for inflation.

The problem with rising house prices is that they leave people behind. The poorest people. And this is very bad for society, both in the short and long term.

It’s demoralising to work a full time job, especially as a couple, and still not be able to afford a home, or save a deposit to buy one.

It reduces the motivation to have a family, so the country’s birth rate falls.

As the birth rate falls, the government has to increase inward migration to prop up the economy, which would collapse with the birth rate if left unaddressed.

Too much immigration creates social division, as well as extra demand for housing especially rented.

Poor quality housing affects the health and life chances of children raised there, meaning we end up with a generation of kids who aren’t skilled enough to do the unfilled, high-paying job vacancies we have.

All the government’s housing market interference, such as Help to Buy, has made this worse.

Artificially low (lower than inflation) interest rates made the problem worse by making it so cheap to borrow money (and not worth saving) that everyone put their savings into housing, and borrowed money at low rates to buy homes, that they now can’t afford at the new, normal rate.

In his March 2024 budget, the Chancellor was expected (by some) to create a new help to buy scheme, or a new government backed mortgage scheme, or some other taxpayer-funded financial boost to the housing market.

But there was nothing. Especially for First Time Buyers.

Nothing for first time buyers?

Which is the best possible news first time buyers could have wished for.

Because this will allow the housing market to return to it’s natural, unfettered, un-boosted state. It will allow prices to fall.

And falling prices will improve affordability for ALL first time buyers, not just the ones who qualify for assistance.

That’s the best thing that could possibly happen for the housing market. It means people won’t get left behind.

It means housing affordability will improve.

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