When talking to people in their twenties, a common complaint arises - that of home ownership. So, what changes to the current housing policies can be made that would benefit all, but particularly the younger generations?
Before advancing solutions it is important to realise why generation rent should become generation buy.
Reports show that the average deposit needed is £8000 more than what it was in the year 2000. The average wage someone needs to have in order to buy a house has risen from £20,000 to £35,000. The most affordable places in the U.K are all either in the north or Scotland. Finally, and perhaps most worryingly, the number of homeowners in London will have dropped to just 40% by 2025.
Young professionals are being squeezed by having to pay higher rents and having to save for higher deposits. This needs to be solved and solved soon.
We currently have what is known as a 'passive housing system', where house-building is led by developers rather than by local councils. This means that house building moves at the pace of the developers, rather than at the pace the market demands of it. If the local councils were given the power to purchase swathes of land (through borrowing or investment from companies) then more radical building could be accomplished.
Another problem is that house-building usually gets tacked onto existing villages or towns. It is easy to see why, as the infrastructure is already there, but this almost always proves unpopular with residents. Allowing councils to buy large parcels of land can result in new towns and new villages being built (though, only if such decisions are matched by a commitment to building the supporting infrastructure to the area). The other key component to this is that each application for building permission is considered individually - this means that the impact assessment is also individual, which can lead to more houses being built in a small area than can be properly supported.
This needs to change. Applications should be considered in a broader context. Central government should be playing a direct role in this, through commitments to build new garden cities and villages. Consider the powerhouse Milton Keynes, with its grid layout and carefully laid out town centres. Consider Letchworth and Welwyn Garden cities, both focused on areas of natural beauty and housing. More of this is needed and would be supported by many.
It is not simply creating new towns and villages that will go some way to helping fix Britain’s housing crisis, more can be accomplished in the cities to support young people buying property.
With the average house price in London at £485,000, and prices beginning to climb in the major northern cities, young professionals are being pushed into the surrounding counties and forced to commute in. There are stories all the time of empty buildings and apartments owned by foreign investors who know it’s more valuable to have the property sit empty then to let it out and deal with tenants and extra buy to let fees and so on. What if, instead, the government took the radical approach of banning or limiting the number of foreign buyers in home ownership shortage areas? It would be controversial, but would help stem the skyrocketing prices.
So too would a relaxation of laws on the city skyline. At the moment in cities around the UK (particularly London) there are strict laws that try to keep the sky line of the city as consistent as possible. Consequently, planning permissions have to go through an extra layer of bureaucracy just to get started. Allowing more buildings to grow upwards would help stabilise the city housing market and allow more young professionals to buy and rent within the city rather than outside it.
The Government's help-to-buy scheme has been a great success story. The original plan of 5% deposit from the customer with a 5% deposit from the local council resulted in 144,000 first time buyers. This scheme needs to continue.
What also needs to continue is a commitment to building a range of different types of houses, designing them for young people. They have less of a need for three or four bedroom houses and would be more inclined to buy and invest in a one or two bedroom property, yet developers tend to build the former, because it can be sold at a higher price.
Mikhail Gorbachev once accused Margaret Thatcher of only being interested in society’s “haves”, and neglecting the “have-nots”. She replied that she wanted to create a whole country of “haves”. “Haves” in this case means homeowners, and home ownership has always been the way to turn young people into Tories. It should be the aim of every Conservative government to support and assist this generation in their home ownership dream.