The financial squeeze on young people is at the centre of the decline in the country’s home ownership, but home owning can only be sustainable in a market of multiple tenures.
This is according to a keenly awaited report, which calls for a long-term, cross-party approach to housing issues.
The Redfern Review into the Decline of Home Ownership, an independent report led by Pete Redfern, chief executive of Taylor Wimpey, and commissioned by shadow secretary of state for housing John Healey, reveals that home ownership remains the tenure of choice for 80% of the English population.
But it is within the younger generation (aged 25-34) that the decline in owner occupation is the steepest, with levels dropping more than 20% over the past 12 years in England.
The Review highlights the primary reasons for the 6.2 percentage point decrease in home ownership between 2002 and 2014 in the UK. These are: tougher first time buyer (FTB) credit constraints; rising real house prices; and the fall in FTB incomes relative to non-FTB incomes.
In a call for a long-term strategy for home ownership, the report authors propose the establishment of an independent Housing Commission to run parallel with the Infrastructure Commission to “take a non-partisan approach to long term housing decisions”. The review found that even with a significant increase in supply, home ownership rates would not necessarily increase as some homes would still enter the rented sector. But supply increases would provide more options.
The report also shows that whilst housing supply does matter to house prices, it only has a meaningful effect in the long term.
At the same time, the report finds that targeting a specific level of home ownership is not only difficult but may create unsustainable house price growth and home ownership. The Review encourages the current and future governments to maintain a consistent environment for all tenures, flagging up the importance of a functional private rented and social housing sector.
Pete Redfern said: “We must focus on supporting today’s younger generation and creating a genuine long-term housing strategy independent of short-term party politics if we are to improve the position in a sustainable way for future generations.
“Any proper housing strategy must focus on all main tenures, including affordable housing and the private rented sector.”
