The Confederation of British Industry (CBI) has produced a report calling all political parties to ensure that coming generations have a realistic opportunity to buy their own properties by increasing the number of new homes being built each year.
Of “Housing Britain”, CBI deputy director-general Katja Hall commented “A perfect storm is brewing in the housing market. Our research shows the national housing shortage is taking a £4 billion slice out of consumers’ pockets.“
The report highlights the fact that consumers are having to pay housing-related costs and transport costs to the tune of £4 billion every year. This is because there is a chronic housing shortage, and people are having to make the choice between living close to work or commuting. 80% of the £4 billion is related to house prices. The CBI say this is preventing young people from getting on the property ladder, and reducing the amount of money people spend in the wider economy.
To reduce the deficit in the housing market which is pushing prices ever higher, the CBI calls for a commitment to build 240,000 new homes every year for the next decade – that is at least double the number now. Indeed, since the millennium, 200,000 new homes was the highest reached in 4 of the 14 years, and in 2010, fewer were built than at any time since 1945.
Other nuggets of information in this report :
- House prices have risen 56% over the past ten years and by 90% in London.
- The average age of an (unassisted) first-time buyer is now 33.
- There will be 70 million people in the UK by 2027.
- The number of people aged 80 and above will double to reach six million by 2037.
- Over £24bn was spent on housing benefit last year, whereas just under £6.5bn was capital investment in new housing stock.
- 80% of the UK population occupies only 6.8% of the land.
- Many areas within the green belt are not “green and pleasant fields” but former industrial sites and waste land.
The CBI would also like to see 10 new towns and/or garden cities (e.g. Ebbsfleet Valley in Kent) built by 2025, a reform of the Stamp Duty regime when appropriate to do so, financial incentives for older people to downsize, and a pipeline of land for local authorities to build on – both green and brown field sites.
In her introduction to the report, Katja Hall says “Britain needs a sustainable, flexible housing market that delivers quality, affordable homes in the places people want to live. We need to double the number of homes we build and this will require bold solutions and an end to the years of politicians putting off difficult decisions. Business and government must work together on an ambitious and credible plan.”