After weeks of campaigning, Liz Truss has been made the new Prime Minister – gaining 81,326 votes during the Conservative Party leadership contest, whilst her competitor Rishi Sunak garnered 60,399. Throughout her campaign, Truss promised to have 300,000 new homes built every year in the UK if she was elected, but they are more issues she must address in the property market.

Properties in the UK are now more unaffordable than ever, with figures released by the ONS showing that the average home sold in England cost the equivalent of 8.7 times the average annual disposable income – which is the worst affordability ratio in England since records began in 1999. For many Brits, getting onto the property ladder is now an unachievable dream. The industry has been suffering in the past few years with a severe undersupply of housing – which has pushed average house prices to a record £294,260 according to recent statistics from Halifax.

The housing industry is also still suffering from regulatory blocks and red tape which is delaying the construction of new housing preventing them from meeting government targets. The rise in the cost of living and rising interest rates have meant that, as far as home buyers and particularly first-time buyers are concerned, it has become increasingly difficult to both raise a deposit and be able to afford the increasing monthly mortgage repayments.

So, what can the new Prime Minister do? David Hannah, Group Chairman of Cornerstone Tax provides some expert insight:

Introduce a five-year fixed rate first-time buyer mortgage:

This will give potential first-time buyers predictability over their outgoings and inflation-proof their mortgage payments. This does not necessarily mean that the government has to subsidise the mortgage but, rather, any excess of base rate plus a reasonable margin over and above the fixed rate on that mortgage could be rolled up into the loan and added at the end of the five-year period.

Continue with the Help to Buy scheme which is due to cease in March 2023:

This is a scheme that aids first-time buyers looking to get on the property ladder. By removing this, it could severely affect the number of new purchasers we see in the property market and the new Prime Minister should consider either extending this or developing a new scheme to replace it.

Provide housebuilders with soft loans (similar to the pandemic business support loans):

This will ensure that the rising cost of capital and borrowed money does not prevent them accessing the resources they need to continue, and indeed accelerate, the British house building programme.

Finally, in order to meet the government’s commitment to reach net zero, all planning restrictions should be removed in relation to green renovations on homes, whether new or existing and including listed buildings. Also, there should be a VAT Zero rating for energy efficiency initiatives, so that the country can move towards its carbon emissions target whilst at the same time stimulating the building industry at a time of national uncertainty and looming recession.