The Resolution Foundation - which describes itself as an independent think tank, and whose chief executive resigned this month to become a Labour parliamentary candidate - says political parties housing targets will be hard to meet after July 4.
A report out today says housing has become an increasingly salient topic among voters in recent years. Almost a quarter of people it surveyed (23 per cent) identify housing as one of the top three concerns facing the country in 2024, more than double the proportion of people who felt this way in 2020 (11 per cent).
The need for action on housing is also driven by the long-term fall in home ownership, especially among young people. The share of families headed by someone aged 19-29 years that own their own home is, at 12 per cent, less than half the level it reached in the peak homeowning year of 1990, although it has risen from a low point of 8 per cent in 2015-16.
The long-term nature of this problem, and the fact that solutions must be sustained to make a difference, mean that the emerging policy consensus in the main parties’ manifestos is welcome, says the Foundation.
Support for first-time buyers includes Labour’s plan to permanently extend the Mortgage Guarantee Scheme (MGS) introduced by the last government, which allows lenders to pay a fee in return for the government underwriting the riskiest part of a mortgage.
The Conservatives have pledged to deliver 1.6 million new homes by 2029, just topping Labour’s commitment to 1.5 million new homes over the same time period.
These are ambitious targets, says the Foundation, requiring at least 300,000 new homes to be delivered in England every year of a five-year parliament. Both main parties say they would achieve this through reforming the planning system, although while the Conservatives are wedded to the green belt, Labour’s strategy is to allow some building on lower quality ‘grey belt’ land.
Its new report notes that the last time we came close to reaching this target was during the housebuilding heyday in the 1970s, when around 250,000 new homes a year were built across England. During this period, local authorities and housing associations played a crucial role, contributing almost half (45 per cent) of all new homes built. In contrast, they contributed to just one-in-five (21 per cent) new homes built in the 2010s – when the average annual number of new homes completed fell to just 136,000.
The lack of new funding for affordable housing will make it extremely challenging for either of the main parties to get remotely close to their housebuilding targets, says the Foundation.
More positively, both main parties have committed funding to improving the energy efficiency of the nation’s housing stock. The Conservatives have committed £6 billion over the next three years to this goal, while Labour have committed an additional £6.6 billion over the next parliament through their ‘Warm Homes Plan’.
And while the main parties have also both pledged to improve conditions for renters by passing a Renters Reform Bill, existing plans to reduce support for low-income private renters via a cash freeze in Local Housing Allowance (LHA) remain in place.
The report authors note that this is a major shortcoming with both parties’ proposals, with today’s private renters spending more of their lives in the sector than previous generations, and paying on average more than three-times as much as mortgagors for their housing (around £11 per metre square for private renters in 2021-22, compared to just over £3 for mortgagors, excluding principal payments).
Failing to link LHA to local rent rises in the next parliament risks placing low-income private renters under increasing strain, at a point where we’ve seen record numbers of households pushed into temporary accommodation (nearly 113,000 by the end of 2023).
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Back in 1990 very few people went to university and student loans hadn't been invented. To use that year as a comparison is ridiculous. Today people enter the workplace several years later than in 1990 and are already saddled with significant debt and student loan repayments.
Also in 1990 house prices had just fallen off a cliff after changes to MIRAS. Circumstances today are vastly different to 1990. Young people have missed out on 5 years of earnings and are entering the workplace in relatively low paid graduate schemes or working in unskilled minimum wage jobs. Of course they can't expect to be homeowners at the same age previous generations were.
Housing supply certainly hasn't kept pace with population growth and countless government schemes have caused prices to be far higher than they would be if market forces had been allowed to control things.
"Affordable" housing is a nonsense. There are 2 new developments being built near me with identical houses. They are 3.8 miles apart. One estate is for full ownership and the other one is for shared ownership. Full ownership price for a 3 bedroom, 3 storey house of the Poplar design is £360000. The identical house on the shared ownership estate is £472500. That strikes me as a complete and utter abuse of people who are desperate enough to resort to shared ownership.
Comparing rent with mortgage interest ignores numerous facts. When did the mortgagor purchase the property? How much deposit did they put in? How much do they pay for property maintenance and insurance? Are they on a historic fixed rate mortgage or a SVR? How much income are they missing out on because the deposit is tied up in the house and not gaining interest in a high income account or stock market investments?
That is a brilliant analysis and comparison.
Agree ever word, great post!
I think Jo should become an MP!! Talk some sense into these Governing idiots.
I read LL today everyday but haven't commented before as everything I would say has already been said.
I'm a Landlord and like everyone else on here have been at a crossroads wondering which way to turn. I have been a LL for 11 years, and always have AST's for 1 year, both sets of Tenants are very good, keep the houses very clean and tidy, and both are up for renewal. Have spoken to Tenants both want to stay and love living in the houses, I just can't bring myself to issue S21's as both would find themselves in a very bad situation, the main worry for me is not being able to regain possession which I will need in around 6-8 years time. So I have taken the plunge and will issue another AST for 1 year, but I know that these contracts could possibly be over-ruled by the new Government. On the otherhand, surely I could challange a decision made by the Government to over-rule a legally binding contract?
I don't have mortgages on either property, so for me BTL is a good investments providing I can gain possession when required.
But still wondering if I should let both go to rolling contracts?
As I have said before Jo should replace Ben Beadle of NRLA or better still head up a separate Landlord Association which reflects all the views on this website.
Margaret - I have mentioned before that I applied to be my local area NLA rep a few years ago and got turned down.
Jo - The reason you were turned down as a local rep was because your agenda is different to theirs! They are not working in the interests of the PRS. We desperately need a new landlord association with you at the helm.
Jo - Brilliant response from you, as usual.
If only YOU were in the political running because you certainly would have my vote.
An INDEPENDENT think tank who’s CEO resigned to become a Labour candidate at the election.🤔
Another Sue Gray by the looks of it.
Jo, fair play you are giving it some wellie there I know many other factors are at play as well.
They didn’t have housing income support and housing allowances where people could live for free without ever making contributions.
They had was 10% Mortgages around their necks and say a carpenter back then was getting less per day than they are getting now per hour.
They had 5 extra years earning buttons, no flying off frequently around the world.
No broadband or Internet to pay for thank god now the root cause of everyone trouble, no Sky / Virgin and loads of other channels, no mobile phones/ iPhones or lap tops which now seems essential to claim your benefits.
No takeaway mopeds bringing breakfast, lunch and supper getting fat as fools.
Most Mortgages were repayment not interest only malarkey that caused many problems where by some ended up with dozens of properties, totally tax efficient preventing others from getting one to live-in. We didn’t have licensing Schemes where by making existing housing stock non compliant by regulations and had to be remodelled, obviously they couldn’t be compliant when the regulations were made after they were Built.
People didn’t have to pay thousands to local Authorities for Planning Permission & Building Regulations like now, don’t forget sometimes thousands to Mayor or London if you want to convert Flats.
Before you it is like the man with the wheel barrow, Congestion Charges and ULEZ / LES etc.
In 1992 Mr Graham Bull leader of Ealing Council stated that they now had the powers needed to deal with any landlord/ Tenant situation quickly and effectively. What on earth have they been doing for last 34 years making more unnecessary regulations every year wasting everyone’s time just causing homeless.
You're totally right about just about everything there. Two things they did have back then that they don't have now were income support would pay mortgage interest if homeowners fell on hard times (I received it from 1993 to 1997). Nothing towards the capital repayment or maintenance but it was enough to retain the house and obviously much cheaper than the alternatives if someone got repossessed.
Secondly Housing Benefit was far more localised. Each property was assessed on its own merits, not a fixed rate for a 500 square mile area.
More good points from you, Michael. Sharing your wealth of experience is always an interesting read. Thank you.
As Jo points out, Help to Buy is a dreadful scheme that only helps builders' bottom line.
We need to build more houses, get the economy going & raise wages. That's how people get on the housing ladder.
No Gov is going to deliver anywhere near enough homes for at least 2 decades.
There’s this little obstacle of a £2 trillion debt called the ‘national deficit’getting in the way!
Sadly you are right. Because of all the environmental standards it is expensive to build. I suspect Labour will increase Council Tax to help fund the building of social housing. Meanwhile if they had an ounce of common sense they would incentivise the PRS.
How about working on reducing the net immigration? That would ease the housing demand. The rate we are going, plus the increase in birth rates it's just going to get more difficult.
Too easy an answer, John.
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