Industry responds to Redfern report

Industry responds to Redfern review



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Home ownership has fallen to 63.6% in 2014/15, despite it being an aspiration for 80% of British people, according to a new report.

The Redfern report is an independent study commissioned by the shadow secretary of state for housing and planning John Healey MP to assess the recent decline in home ownership and how it can be addressed.

It was found that one of the key features in the decline in ownership was the lack of access to mortgage finance.

The higher cost and restrictions on mortgage lending for first-time buyers is estimated to have cut 3.8% off the UK home ownership rate from 2002 to 2014.

Pete Redfern, chief executive of Taylor Wimpey, who led the review, 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.”

Development Finance Today asked industry figures their thoughts on the report.

Trussle

Ishaan Malhi, CEO and founder of Trussle, said: “The Redfern Review has rightfully cast a brighter light on what has become the biggest issue for young adults for a generation – affording their first home.

“Mortgage rates are as low as they’ve ever been, according to yesterday’s figures from the Council of Mortgage Lenders [CML], yet home ownership is continually falling with young people bearing the brunt of this decline.

“The government has introduced various policies to stem the issue and housebuilders have also responded, with housebuilding now at its strongest level for eight years.

“But it will take a long time to tip the scales of supply and demand, making homes more affordable for young first-time buyers on moderate incomes.

“What they can do now, however, is to engage in the process of buying a home at the earliest possible stage.”

The report suggested that the government refocus the Help to Buy scheme more exclusively to first-time buyers, expand the scale of the Lifetime Isa and extend the ‘one for one’ replacement policy for Right to Buy so that all council homes sold through the scheme are replaced, rather than just some of them.

Aldermore

Charles Haresnape, group managing director for mortgages at Aldermore, said: “To diminish the role that decades of housing undersupply have had on prices and a market where our own research has found that almost a quarter of respondents were not planning to ever own a house is to bypass the major issue most see in the industry.

“If there are no ‘short-term’ solutions to the undersupply of housing, it is because the problem of under-construction has not been caused over the short term.

“Yesterday’s CML data showed that mortgage affordability is at a historic low for those lucky enough to make it on to the property ladder, but competition for affordable properties means that many lose out.

“Housing policy should no longer be thought of as one group versus another, since this leads to a fragmented market as well a fragmented approach to reform which ultimately makes change more difficult.”

Landbay

John Goodall, CEO and co-founder of Landbay, added: “Part of the solution will involve growing confidence in alternative investment options, which can help young people grow their deposits at a reasonable pace.

“Another is to ensure we are building across all tenures, and investing in the future of the rental market.

“With home ownership still a pipe dream for many, and a growing trend for flexible living, the buy-to-let sector is growing quickly to meet this demand, while also alleviating the rental pressure on aspiring homeowners.”

The report suggested that an independent Housing Commission should be set up alongside the Infrastructure Commission.

The authors of the report claim that it is the most comprehensive review into home ownership in over a decade.

It was led by Pete Redfern, chief executive of Taylor Wimpey, and supported by Terrie Alafat, the former director of housing at the Department for Communities and Local Government; Dame Kate Barker, a former Bank of England Monetary Policy Committee member; Andy Gray, deputy chair of the CML; and Ian Mulheirn, director of consulting at Oxford Economics.

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