If you’re young, in work and not living with your parents, chances are you rent a flat or a house with friends. The way things have been going for the last 30 years you’d probably expect to be doing so until you are well past the married-with-children phase of your life.
With available housing stocks and new builds reducing in number since the 1980s demand has outstripped supply since Thatcher was issuing government press releases to the point that between 2000 and 2010 average prices nearly doubled from £114,000 to £216,000.
The lack of new builds and social housing, rising rents, dependency on phantom housing wealth and the lack of people able to get on the housing ladder has led to little but homelessness, economic woe, rising costs, lengthening waiting lists, increased overcrowding and an intergenerational gap in home ownership.
Which is why the coalition's housing plan is welcome news. No government has had a properly joined up plan since the 1970s. Thatcher’s right to buy was bold policy but the council houses sold off were never replaced and under Labour the lack of new housing, rise in landlord speculation and the subsequent property market bubble was a direct contributing factor to the current housing crisis as well as the consumer debt fuelled boom which led to the financial crisis and austerity woes we face today.
The answer to tackling our housing crisis is not difficult. We need many more homes to satisfy demand. This will allow greater affordability which will stimulate home building and alleviate the social housing waiting list – up to five million people are currently registered with councils but it needs government impetus to make it happen.
The coalition's plan has two main elements: £400m direct money to finance the building of new homes and an effective government subsidy for first time buyers to reduce the size of mortgage deposits, in some cases up to 25% of the home’s value, to just 5%. For many younger people suffering wage freezes and rising costs, deposits quarter the value of the home have simply been financially impossible even with support from parents.
The plan also includes a £100m Empty Homes Fund to bring vacant, but not fit for occupation, property back into use as affordable housing and a renewal of the right to buy policy, with greater discounts and, crucially, a pledge to build a new affordable home for every one sold to avoid the pitfalls of the past.
The plan also goes in concert with important government plans to reduce planning regulations and to free up public land to encourage development and building.
Owning a home is currently out of the reach of most young people, especially for those struggling to find and stay in employment and renting means you have little control over your home, uncertainty from rent period to rent period and is ultimately a waste of capital. Today’s announcement is a welcome first step to allowing this generation of young people the same opportunities their parents enjoyed 30 years ago.