Home ownership to slump to 63% over next decade

National Housing Federation calls for renewed commitment to house building as home ownership set to reach lowest level since the eighties

Home ownership in England is set to slump to just 63.8% over the next decade, its lowest level since the eighties, the National Housing Federation has warned.

The federation, which represents England’s housing associations, called on ministers to make a renewed commitment to home-building, saying government investment in affordable housing would stimulate a wider, faster economic recovery and help boost the ailing housing market.

It said suitable surplus public land should be made available for the building of affordable homes, and urged local authorities to assess their housing needs regularly.

House building in England is at its lowest level since the twenties, with just 105,000 built in 2010-11. Local authorities have scrapped plans for more than 220,000 new homes since the government announced the abolition of regional housing targets last year.

The federation said almost half of the homes built in England in 2010 were produced by housing associations, and that they are on course to deliver 50,000 affordable homes a year despite seeing government grants slashed by 63%.

Ministers are planning to remove tenants’ rights to have their housing benefit paid directly to their landlords, a proposal that the federation says imperils the financial future of housing associations and hinders their ability to borrow from the banks.
Forecasts produced for the federation by Oxford Economics predict that a chronic under-supply of homes will trigger steep rises in the private rental sector, expanding social housing waiting lists, and a house price boom.

In London, renters could become a majority as the number of owner-occupiers is expected to fall from 51.6% in 2010 to 44% by 2021.

Only the North-east looks set to resist the trend, with forecasters anticipating a slight increase in owner occupier numbers by 2021, from 66.2% to 67.4%.

It is claimed the average house price in England will rise by 21.3% over the next five years, from £214,647 in 2011, to £260,304 in 2016.

Meanwhile, a shortage of properties could force average rents in the private sector up by 19.8% over the next five years, from £486 a month in 2011 to £582 a month in 2016. Such an increase would see tenants paying £1,152 more per year.

Federation chief executive David Orr said: “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.

“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.

“At the heart of this crisis is a chronic shortage of new homes. Despite the overwhelming need to increase supply, house building has slumped to a 90-year low, plunging the country even deeper into the mire.

“Ministers need to make unused public land available to housing associations, local authorities must assess the level of housing need in their area, and housing has to be finally treated as a top political priority.”

Source : Becky Seales – Building.co.uk
www.building.co.uk/news/breaking-news/home-ownership-to-slump-to-63-over-next-decade/5023736.article