As a direct result of government policy the housing market is overheating, with average prices rising at nearly £10,000 a month according to the Bank of England. The number of mortgages for more than four times annual salary is at an all-time high. This debt will be effectively unrepayable if interest rates move back to their usual 10-year average.
Private sector renting is the norm for young people as ownership drifts further from their reach and social housing lets are almost impossible to find.
There were 115,000 housing completions in 2013, a record peace-time low and less than half of the 240,000 needed just to meet the rise in demographic demand.
Home ownership in England has fallen to its lowest level for a quarter of a century, down from 71 per cent in 2003 to 62.5 per cent last year according to the government’s latest English Housing Survey Headline Report, issued in February. Meanwhile, the number of households where people are living in private rented accommodation now stands at 4 million, almost double the 2.2 million in 2003.
More than a third of England’s 14.3 million homes are owned by people over 65, with just 1.4 million owned by people between the ages of 25 and 35, the cohort most likely to be raising a young family. The proportion of people under 25 owning or buying their own home has fallen from 36 per cent in 1991 to just 11 per cent now.
Some 66 per cent of those on benefits are in social housing, while over the past four years the proportion in private rented accommodation has increased from 19 to 25 per cent.
The number of private tenancies now exceeds those in the public sector for the first time ever; half of those renting privately are under 34. There are no statutory controls on the rents that private landlords can charge leading to a steep increase in the number of tenants claiming housing benefit since 2010, including for those in work.
Without a single extra pound of taxpayers’ money the £130 billion in mortgage loan guarantees could fund a programme to build the required 240,000 homes a year. But if, as now, new homes are mostly built for the wealthy, or snapped up by buy-to-let landlords, things will only worsen. Regulation of the housing market is sorely needed. ■