Housing crisis: ‘Councils must get back to building homes,’ say council chiefs

A consortium of local authorities launched a major campaign today, pleading for local councils to be encouraged to get back to building homes.

The hard-hitting campaign, directly aimed at the Government, comes as it is revealed that home ownership rates among 25-year-olds have plummeted by more than half in 20 years, while the number of new homes being built for social renting has plunged 88% in the same time.

New analysis by Savills for the Local Government Association reveals that almost half (46%) of all 25-year-olds owned their home 20 years ago. In a generational shift, only 20% of 25-year-olds are on the housing ladder today.

The LGA says that access to home ownership will be increasingly limited and is calling for measures such as more homes to be made available for affordable or social rent, enabling families to save for deposits.

The Savills analysis shows:

  • 6,550 social rented homes were built in 2015/16 compared with the 56,950 built in 1995/96.
  • On average, private renters now pay 34% of their total household income on rent, and social and affordable renters pay 29%.
  • In comparison, home owners pay an average of 18% of their total household income on their mortgage.
  • Average house prices are now at 7.9 times average earnings. The average size of a deposit needed to get a mortgage is 62% of annual incomes, while in London it is 131%.

The LGA, which represents more than 370 councils in England and Wales, says the total proportion of households that are home owners of all ages across the country has fallen by 4.4%  since 2008 while the proportion of households that are private renters increased by 5.1%.

The LGA says there is also an urgent need to better provide housing for older people.

Between 2008 and 2039, 74% of projected household growth will be made up of households with someone aged 65 or older. The organisation argues that an increase in age-friendly housing will be crucial to helping older people stay healthy and happy for longer, and reducing demand on NHS and care services.

Cllr Martin Tett, LGA housing spokesman, said: “The housing crisis is complex and is forcing difficult choices on families, distorting places, and hampering growth. But there is a huge opportunity, as investment in building the right homes in the right places has massive wider benefits for people and places.

“There is no silver bullet and everyone must come together to meet the diverse housing needs in our villages, towns and cities.

“The Government’s Housing White Paper will be an opportunity to boost housing supply and affordability. It must recognise that a renaissance in house building by councils will be crucial to helping ensure the mix of homes to rent and buy that are affordable for those people that need them.”

The White Paper is due to be published next month.

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