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Government housing schemes: Accident or design?

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Published: 16 November 2016

There are two key policy challenges in the housing market today.

  • The first is we are not building enough homes – we built 140,000 in 2015/16, also the annual average of the last decade, when we need to build at least 200,000 a year.
  • The second is falling rates of home-ownership, from a peak of 70.9% of households in 2003 to 63.6% in 2014/15 (latest).

 It comes as little surprise therefore that the Government’s high level policy objectives are supporting new supply and promoting home-ownership. The Government’s strategy has been to entwine these in their policy prescription.

Promoting home ownership for certain key groups – younger people, first-time buyers, social housing tenants – is about addressing two problems:

  1. The first is affordability and the issue of rising home prices to earnings.
  2. The second is accessibility and the issue of equity (that is, a deposit), namely levelling the playing field for the key groups that don’t have it and other groups that do.

Both problems are clearly interrelated. There is now a considerable range of Government housing schemes to promote home ownership – currently eight (soon to be seven), supported by a further two schemes that support schemes namely the Help to Buy and Lifetime ISAs.