Government housing schemes: Accident or design?
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:
- The first is affordability and the issue of rising home prices to earnings.
- 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.