Housing in England: overview Read full text in English
1 Various public bodies responsible for the same domain
Risk of conflicting objectives
There is potential for government housing policies to have conflicting objectives. Various public bodies have responsibilities for housing, often using housing as a means of achieving other objectives. Also, changes made in one area of housing policy can impact on other areas. This can lead to tensions in delivery. For example, in July 2015, the government announced a reduction in the rents housing associations and local authorities could charge of 1% per year. This reduced the ability of housing associations to finance the construction of new housing.
2 Demand growing faster than supply
Product more affordable for existing owners, but less affordable for the first-time buyers
For existing homeowners, housing has become more affordable in recent years, but for first-time buyers it has become less affordable. Since 2008, the proportion of owner-occupiers who spend at least a quarter of their disposable income on housing has halved, falling from 40% to 19% of people with a mortgage. Today, first-time buyers pay deposits of 21% on average, compared with 13% in 1990. The amount that first-time buyers have to borrow to buy their first home has risen from 2.3 times average income in 2000 to 3.2 times income in 2014.
The need for housing in England has in recent years grown faster than its supply. To keep up, housebuilding needs to increase across the country, and undergo a step change in London. Housing has become more affordable for existing homeowners. In contrast, social rents have risen faster than wages, as have private rents in London. Housing is less affordable for a first-time buyer now than it was in the 1990s. Homelessness has also increased over the past five years.
Background
Housing is one of the government's key priorities. For many people, the availability and affordability of housing has become increasingly difficult in recent years. With its housing policies, the Department for Communities and Local Government (the Department) is seeking to address the supply and affordability of housing in England. The government has two strategic housing objectives for this Parliament: driving up housing supply, with the ambition of delivering a million new homes over the next five years, and increasing home ownership. These objectives are supported by a range of interlocking programmes; the government intends to publish a Housing white paper setting out a package of reforms to increase housing supply and halt the decline in housing affordability in early 2017.
For existing homeowners, housing has become more affordable in recent years, but for first-time buyers it has become less affordable. Since 2008, the proportion of owner-occupiers who spend at least a quarter of their disposable income on housing has halved, falling from 40 % to 19 % of people with a mortgage. Today, first-time buyers pay deposits of 21 % on average, compared with 13 % in 1990. The amount that first-time buyers have to borrow to buy their first home has risen from 2.3 times average income in 2000 to 3.2 times income in 2014 (paragraphs 1.12 to 1.13 and Figures 6 and 7).20 The need for housing in England has in recent years grown faster than its supply. To keep up, housebuilding needs to increase across the country, and undergo a step change in London. Housing has become more affordable for existing homeowners. In contrast, social rents have risen faster than wages, as have private rents in London. Housing is less affordable for a first-time buyer now than it was in the 1990 s. Homelessness has also increased over the past five years.
Objectives
This report is designed to provide an overview of the housing market in England, the overall, cross-cutting public policy landscape, and the Department's housing strategy. We have not assessed the merits of the government's objectives or the value for money of any individual programme supporting these objectives. We do, however, comment on the ability of the government to achieve its ambition of delivering on million new homes. In addition, we seek to provide clear information on the housing landscape and the Department's housing objectives. We aim for this report to lead to future studies that focus on particular aspects of housing policy, building on the work that we, and the Committee of Public Accounts, have carried out on the implementation of housing‑related policies in recent years.
For existing homeowners, housing has become more affordable in recent years, but for first-time buyers it has become less affordable. Since 2008, the proportion of owner-occupiers who spend at least a quarter of their disposable income on housing has halved, falling from 40 % to 19 % of people with a mortgage. Today, first-time buyers pay deposits of 21 % on average, compared with 13 % in 1990. The amount that first-time buyers have to borrow to buy their first home has risen from 2.3 times average income in 2000 to 3.2 times income in 2014 (paragraphs 1.12 to 1.13 and Figures 6 and 7).20 The need for housing in England has in recent years grown faster than its supply. To keep up, housebuilding needs to increase across the country, and undergo a step change in London. Housing has become more affordable for existing homeowners. In contrast, social rents have risen faster than wages, as have private rents in London. Housing is less affordable for a first-time buyer now than it was in the 1990 s. Homelessness has also increased over the past five years.