The report, led by Taylor Wimpey chief executive Peter Redfern and commissioned by the Labour party, said to “genuinely increase homeownership rates”, relative wage rates and mortgage lending standards must be challenged or tailored subsidies for certain borrowers should be provided.
According to the report, the primary causes of the 6.2% drop in homeownership between 2002 and 2014 are higher mortgage costs and tougher lending restrictions for first-time buyers and a rapid increase in house prices and declining incomes among younger people.
However, the review found the impact of new supply on house prices in the short term to be “very small”.
“New household formation and supply have been broadly in balance over the last 20 years and therefore the significant increases in house prices over that period have not been driven primarily by supply constraints,” it said.
Analysing the factors contributing to the decline in UK homeownership, the review suggests several remedies to solve the issue.
Among the proposals are the creation of an independent housing commission and a shift to focus on variety of housing tenures, including the promotion of a “healthy and stable renting environment”.
The Redfern Review warns that specifically targeting homeownership could be “damaging” to the market, by encouraging unsustainable house price growth and unsustainable homeownership.
It named the government’s Help to Buy scheme as a particular concern, referencing the potential for future inflationary issues. The review suggests that the initiative should be tailored more exclusively to help first-time buyers and be aimed at lower price points regionally.
Peter 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.”
In its conclusion, the review calls for a long-term strategy for the housing market, involving cross-party cooperation to allow developers to safely invest in larger projects and infrastructure. Cross-party agreement on housing targets and improved resourcing for planning departments should also be considered, it said.
John Healey MP, the shadow secretary of state for housing, said: “At root, this decline in homeownership matters to me because it matters to so many people in this country that we are determined to serve. And it matters too because the shrinking opportunity for young people on ordinary incomes to own a home is at the centre of the growing gulf between housing haves and housing have-nots. Housing is at the heart of widening wealth inequality in our country.”
