Government advisers urge expansion in housebuilding despite price falls
England’s regional housing targets need to increase by almost a third in order to ease affordability pressures, the government’s housing advisory body has said.
The National Housing and Planning Advice Unit said increasing the number of homes in regional plans from 205,000 extra homes each year to 2016 to between 300,000 and 350,000 could allow 500,000 more households to own their homes by 2026. Without an increase in building 1m households would be unable to set up home together.
The report said affordability would not improve even if house prices fell by 5 per cent this year and 10 per cent in 2009.
It warned that more people would need state housing support if more private market housing was not built. Doubling social housing without boosting market housing would worsen affordability for people on lower incomes, it said.
The paper also said that the explosion in the number of homes bought by buy to let landlords had increased house prices by about £13,000 or 7%.
The unit’s chair Stephen Nickell said planners must “plan now for the upturn that we know will come”.
He said: “With affordability stretched and mortgage finance much harder to secure and more expensive, even with house prices falling the outlook for first time buyers is very difficult in the short term. And in the medium and long term the position is just as bad. As the financial system begins to ease then the under supply of new homes implied by emerging regional plans would support the next unsustainable upswing in prices, which will leave many potential buyers high and dry - locked out of owner occupation.”