On 16th November the Bishop of St Albans received a written answer in response to a question on house prices, sales and diversification:
The Lord Bishop of St Albans: To ask Her Majesty’s Government, further to the Written Answers by Lord Greenhalgh on 1 October (HL8296), 6 October (HL8828), and 28 October (HL9442), what assessment they have made of the impact of (1) fears of negative equity on existing house purchases, and (2) house prices rising faster than wage increases, on the effectiveness of diversification. [HL9871]
Lord Greenhalgh: In response to Part 1: The Government has taken unprecedented measures to support consumers, businesses and the wider economy. Many homeowners will benefit from these measures.
The Government has strengthened the welfare safety-net with over £9 billion boost to the welfare system. The furlough scheme has been extended to the end of March, with employees receiving 80% of their current salary for hours not worked. The Government has also supported business during this time through the coronavirus business interruption schemes, the bounce back loans and the future fund.
This package of support also includes mortgage holidays for up to 6 months, and a moratorium on lender repossession enforcement until 31 January 2021. These measures continue to protect homeowners who have been affected by coronavirus from unaffordable costs if they cannot work due to the coronavirus pandemic.
The Government has also taken substantial measures to support the housing market. We have introduced a stamp duty holiday, with effect until 31 March 2021, raising the threshold for paying stamp duty land tax from £125,000 to £500,000. We have kept the housing market open, with clear guidance on how to conduct home buying and selling amid Covid-19 restrictions. We have taken measures to ensure that the housing market and all associated activities can continue during the current lockdown, and the housebuilding sector, in line with the wider construction sector, will continue to operate and follow Covid-19 secure guidelines. In combination, these measures have ensured a functioning and effective housing market. There are currently high levels of transactions in the market. The provisional seasonally adjusted estimate of UK residential transactions in September 2020 is 98,010, which is very similar to September 2019 at only 0.7% lower and 21.3% higher than August 2020.
In response to Part 2: the Government wants to see the housing market diversify over the long term, regardless of short term movements in house prices. We support community and self-builders, small and medium enterprises, and those who are building homes in innovative ways. We have put in place initiatives to diversify the market including the £2.5 billion Home Building Fund, which received a £450 million boost in June, and the £1 billion ENABLE Build guarantee scheme. In addition, we are supporting the Build to Rent sector with a £3.5 billion Guarantee Scheme, driving up standards and quality across the private rented sector. Leveraging in more private investment will help create skilled jobs and drive economic growth while our ongoing planning reforms will reduce burdens on the construction sector.