The landmark report from accountants KPMG and housing charity Shelter, outlines how the 2015 government could turn the tide on the nation’s housing shortage within a single parliament.
It says that England is building just less than half of the 250,000 new homes a year needed to keep up with demand and average house prices would be over £900,000 by 2034 if current trends continue , a quadrupling of current prices.
The research also shows more and more people priced out of a home of their own as housing costs soar, a trend that could see more than half of 20 to 34 year olds living with their parents by 2040.
KPMG and Shelter’s report sets out essential reforms to increase the supply of affordable housing and stabilise England’s rollercoaster housing market. It calls on politicians to commit to a range of key measures, including releasing infrastructure spending to unlock stalled house building sites.
It also suggests setting up a Help to build scheme, using government guarantees to help small builders access the market and introducing a new National Housing Investment Bank to finance affordable house building.
‘What is clear from our report is just how big and messy our housing problem is. For many people, particularly those in their twenties, the aspiration of owning their own home is fast becoming a fairy tale. We also know, as an employer of 12,000 people, that an unstable housing market affects our ability to attract and retain talent,’ said Marianne Fallon, UK head of Corporate Affairs at KPMG.
‘However, our report shows that a government which is prepared to roll up its sleeves and commit to a programme to tackle each element of the problem, over a parliament and beyond, has the chance to make home ownership a realistic dream again,’ she added.
Campbell Robb, chief executive of Shelter, said that thousands of young families were paying the price for successive governments’ failure to build enough homes.
‘With housing now a top issue for voters, politicians of all parties are rightly beginning to feel the need to act. This isn’t just a blueprint for how to get Britain building, it’s a blueprint for how to restore the aspirations of a generation who’ve been left with little hope of a home of their own,’ he added.
Meanwhile, new research from financials services company Castle Trust reveals that around 772,000 people who plan to become home owners one day are waiting to receive an inheritance before they can do this.
Castle Trust warns that improved life expectancy means many relying on a financial windfall will have to wait longer before they can buy and new ways need to be found to make it easier for parents and grandparents to release their wealth earlier, and pass more on directly to the younger generations, skipping generations if necessary.
It found that 4.1 million adults have given up on ever owning their own home and 1.8 million of these people are aged 25 to 44. Also, only one in seven adults not currently on the property ladder believes they will buy a home before they are 30.
Over half of those struggling to get on to the property ladder, 53%, cited raising a deposit as the key reason, 38% said it was because they don’t earn enough whilst 21% said that they would not be able to keep up with their mortgage repayments.
‘We agree with many of the points raised in the report. There is a crisis in the UK housing market where young people have little or no chance of getting on to the property ladder unless they receive financial support from parents or grandparents,’ said Matthew Wyles of Castle Trust.
