Housing Market Pressures and Government Policies: Navigating the Challenges

Build Warranty Group wrote in October 2024 that the UK housing market had come under heavy strain from high prices, short supply and economic uncertainty. It said demand had consistently outstripped new building, driven by population growth, more single-person households and migration, pushing the average price to about £290,000 in mid-2024. First-time buyers face larger deposits and tougher mortgage requirements, while more renters are competing for homes at rising rents with little security.

The article reviewed government responses. Help to Buy, running since 2013, offers loans for new-build purchases with smaller deposits, though critics say it has fuelled demand and prices. First Homes, introduced in 2021, offers new homes to first-time buyers and key workers at a permanent discount of 30 to 50 per cent, but limited availability restricts its effect. Stamp duty has been adjusted from time to time, most notably in the pandemic holiday, whose lasting effect on prices the firm called minimal. The government also set a target of 300,000 new homes a year, backed by planning reform and developer incentives, although land availability and skills shortages have slowed progress.

The company added that as supply grows, home warranties protecting against structural defects will matter to developers and buyers, and described its own role in helping developers manage risk and meet regulations.

Source: Build Warranty Group, originally published on The Landsite (25 October 2024)