Ministers confronted with ‘chronic under-supply of homes’
By politics.co.uk staff
Falling home ownership rates and a 20% increase in rents over the next five years are likely without government action on housing, a report has warned.
The National Housing Federation (NHF) said ministers needed to take action to address the "chronic under-supply of homes" currently faced in England.
Research for the NHF by Oxford Economics found that fewer people would be able to get their first foot on the property ladder because of increased demand, which is pushing asking prices – as well as deposits – higher.
The next decade could see home ownership rates slip from 67% to below 64% as a result.
"With home ownership in decline, rents rising rapidly and social housing waiting lists at a record high, it's time to face up to the fact that we have a totally dysfunctional housing market," NHF chief executive David Orr said.
"Home ownership is increasingly becoming the preserve of the wealthy and, in parts of the country like London, the very wealthy.
"And for the millions locked out of the property market the options are becoming increasingly limited as demand sends rents rising sharply and social homes waiting lists remain at record levels."
Earlier this year the government announced a £250 million FirstBuy scheme to help people with their deposit, by lending them up to 20% of the value of their property.
The move has been approved of by the NHS but it pointed out only a small fraction of those seeking to become homeowners would be helped.
Spending cuts have forced the government to cut its investment in new lower-cost homes by 63%.
Housing minister Grant Shapps insisted the £4.5 billion investment would help alleviate the problem. He said the affordable homes programme was "set to exceed our original expectations and deliver up to 170,000 new homes over the next four years".
But shadow housing minister Alison Seabeck said the government's policy changes would make it harder, not easier, for people to buy a house.
"For many months, Ed Miliband has been campaigning to protect the promise of Britain – the commitment that each generation will do better than the last," she commented.
"The Conservative-led government are breaking this promise by cutting investment in housing and removing the requirement on local authorities to allow new homes to be built, putting renting or buying a property out of reach for far too many people."
