At yesterdays Treasury Select committee meeting, David Willetts asserted that the fall in home ownership amongst the young was due to a lack of housing. This myth is a common misconception held by various politicians and commentators, who appear not to have actually looked at the evidence.
“Rishi Sunak has been urged to consider a postwar-style programme of new town construction in England to tackle the collapse in home ownership among young adults. David Willetts, a Conservative peer and former universities minister, told the Commons Treasury committee that failure to increase the supply of affordable homes was among reasons for rising levels of inequality between young and old.”
At the same committee meeting, Ian Mulheirn, who has carried out extensive research on the subject, set out why home ownership has fallen, completely refuting the assertions of David Willets.
Extracts below from Ian Mulheirns twitter feed.
“What can we do about that to get closer to 70% home ownership? Introduce a permanent, compulsory mortgage guarantee scheme for FTBs and foster a long-term fixed rate mortgage market See here for more: https://institute.global/insights/geopo
Why has home ownership fallen? Yes house prices are a drag. But the mortgage market is an even bigger influence and it has been exacerbating intergenerational wealth inequality Here's a deep dive on that: https://institute.global/insights/geopolitics-and-security/home-ownership-and-uk-mortgage-market-international-review
And finally of course... here's why we can't blame the 25-year rise in the house price to income ratio on housing scarcity. More on that here: https://housingevidence.ac.uk/wp-content/upl
Meanwhile rented housing has become less affordable - even though market rents have grown slower than average earnings - because housing benefit has been cut and social housing eroded. Full analysis in our @jrf_uk paper https://jrf.org.uk/report/housing”
The conclusion - check the evidence before you propose a policy!
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