Housing White Paper - PwC comments

Outlook worsens for ‘generation rent’: only one in four to be homeowners by 2025

Commenting on the White Paper “Fixing our broken housing market”, Richard Snook, senior economist at PwC, said:

“Over the last two years we have highlighted the plight of ‘generation rent’, those in the 20-39 age bracket at risk of being locked out of the housing market due to high prices, high deposits and rising interest rates.

“Home ownership rates for younger adults have been falling sharply, we estimate that by 2025​,​ 59% of 20-39 year olds will be renting privately, up from 45% in 2013. Only 26% of those in generation rent will own their own home by 2025, down from 38% in 2013.

“Today’s White Paper “Fixing our broken housing market” seeks to help generation rent and other participants in the property market by improving affordability for those seeking to buy, while also helping to improve the rental market.

“While the paper includes a raft of new measures, the absence of change in key policy areas is perhaps more striking. There appears to be no major new initiatives on tax, the greenbelt or enabling Local Authorities to borrow to build.

“Demand for housing in the UK has outstripped supply for more than two decades and we have been calling for measures to promote housing supply. We welcome the measures in the White Paper which may lead to a smoother planning system and promote increased building over the coming years.”

The key measures contained in the White Paper include:

• An ambition to release surplus public land with capacity for 160,000 homes during this Parliament.
• A £2.3bn Housing Infrastructure Fund to fund new infrastructure which is required to unlock development.
• Streamlining the planning process by restricting appeals, and raising fees to fund more planning resources in local government.
• The previously announced £3 billion Home Building Fund​,​ which will provide £1 billion of short-term loan finance targeted at SMEs, custom-builders and innovators to deliver up to 25,000 homes this parliament; and a further £2 billion of long-term loan funding for infrastructure and large sites, unlocking up to 200,000 homes.
• The previously announced £7.1 billion Affordable Homes Programme. This is aimed to help build around 225,000 affordable homes in this Parliament.
• Committing to the Help to Buy Equity loan scheme until 2021.
• A £1.2 billion Starter Home Land Fund which will be invested to support the preparation of brownfield sites to support other developments.

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