Last edited 05 Apr 2017

Redfern review into the decline of homeownership

On Wednesday 16 November 2016 the Redfern review into the decline of homeownership was published, described as the most comprehensive review into home ownership in over a decade, and drawing on bespoke polling, focus group evidence, expert analysis and modelling. This came just after publication of the Lyons Housing Commission report ‘What more should Government do to promote the building of new homes’

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The Redfern Review was commissioned in October 2015 by Labour MP John Healey, Shadow Secretary of State for Housing, and was led by Pete Redfern, Chief Executive of Taylor Wimpey, supported by an independent advisory panel and Oxford Economics.

The Review highlights the fact that whilst 80% of people see home ownership as the preferred form of tenure, there has actually been a significant fall in home ownership in England, from 70.9% in 2003 to 63.6% in 2014/15. This has been as a result of the higher cost of mortgage lending for first time buyers and the rapid increase in house prices, exacerbated by the decline in the incomes of younger people, aged 28-40, relative those aged 40-65. The decline in home ownership amongst young people has been more than 20% in 12 years.

However, rather surprisingly, the Review suggests that high property prices are a result of rising household incomes, high employment and falling interest rates rather than a lack of housing supply, which it argues has been broadly in balance with new household formation over the last 20 years. It suggests that if conditions remain broadly the same, the rate of decline in home ownership will actually stabilise in the near term.

The Review calls for a cross-party approach to housing issues and proposes the establishment of an independent Housing Commission to take a non-partisan approach to long-term housing decisions. This would be analogous to the National Infrastructure Commission, and its primary role would be to make recommendations about the impact of policy changes on long-term supply and the reasons for house price trends.

It encourages Governments to focus on all tenures, supporting both a healthy private rented sector and a supportive social housing sector.

Pete Redfern said: “The detailed analytical work of the Review reveals the challenges that young people face in buying their first home and highlights the impact on them of long-term falls in relative incomes and ability to borrow. We must focus on supporting today’s younger generation and creating a genuine long-term housing strategy independent of short-term party politics if we are to improve the position in a sustainable way for future generations.”

John Healey MP, the Shadow Secretary of State for Housing, said: “Housing is at the heart of widening wealth inequality in our country. Labour is determined to get to grips with the falling number of home owners and this Review gives us, and politicians of all parties, the foundation to do that.”

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