Following yesterday’s Housing White Paper announcement from the Government, the outlook for generation rent has worsened, with only one in four tenants expected to be homeowners by 2025, according to PwC.
The White Paper, which vowed to fix Britain’s broken housing market, has been received with criticism from the private rental sector. The RLA insists that it didn’t show enough support for individual landlords, who provide the majority of rental housing supply.
Only One in Four Tenants will be Homeowners by 2025
The following key measures were included in the announcement:
- An ambition to release surplus public land with capacity for 160,000 homes during this Parliament.
- A £2.3 billion Housing Infrastructure Fund to fund new infrastructure, which is required to unlock development.
- Streamlining the planning process by restricting appeals and raising fees to find more planning resources in local governments.
- 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, aimed at helping to 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.
The Government has pledged to shift its focus from homeowners to renters in the latest bid to solve the housing crisis.
The Senior Economist at PwC, Richard Snook, responds to the Housing White Paper: “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.
“Homeownership 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.”
He continues: “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.”
Snook concludes: “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.”
Landlords, although your needs may not have been sufficiently addressed in the announcement, you can take certain steps that will help those struggling to become homeowners. By sticking to the law and acting responsibly, you will ensure that your tenants live in safe, comfortable and affordable homes.
Our FREE guides can help you keep to your obligations: /guides/