Average house prices in England could double in just ten years to £446,000 without the introduction of a radical house building programme.
The figure was unveiled following research from KPMG and Shelter as part of the report entitled ‘Building the homes we need – a programme for the 2015 Government’, which also showed that in twenty years time, houses could cost as much as £900,000 on average.
Staying with parents
The study also found that half of all 20 to 34 year olds could be living with their parents by 2040, as more and more UK residents are priced out of home ownership
The warning comes as KPMG and Shelter launch a landmark new report, outlining how the 2015 government can turn the tide on the nation’s housing shortage within a single parliament.
With recent government figures showing that homeownership in England has been falling for over a decade, the consequences of our housing shortage are already being felt, according to the pairing.
The report sets out a blueprint for the essential reforms that will increase the supply of affordable homes and stabilise England’s rollercoaster housing market.
It calls on politicians to commit to an integrated range of key measures, including:
- Giving planning authorities the power to create ‘New Homes Zones’ that would drive forward the development of new homes. Combined with infrastructure, this would be led by local authorities, the private sector and local communities, and self-financed by sharing in the rising value of the land.
- Unlocking stalled sites to speed up development and stop land being left dormant, by charging council tax on the homes that should have been built after a reasonable period for construction has passed.
- Introducing a new National Housing Investment Bank to provide low cost, long term loans for housing providers, as part of a programme of innovative ways to finance affordable house building.
- Helping small builders to get back into the house building market by using government guarantees to improve access to finance.
- Fully integrating new homes with local infrastructure and putting housing at the very centre of City Deals, to make sure towns and cities have the power to build the homes their communities need.
Campbell Robb, Shelter’s chief executive, said: “Our chronic shortage of affordable homes means that a generation face a future of living in their childhood bedrooms into their thirties. But this report proves that the next government can turn the tide on the housing shortage within a single parliament.
“The reality is that government backed mortgages like Help to Buy or tweaks to planning rules will only ever be sticking plaster solutions that risk making the problem worse, not better. We will only build the homes we need by creating a healthier housebuilding market through boosting small builders, giving towns and cities more power, finding new investment, and getting land into the hands of those who can get building high quality, affordable homes.
Government intervention
Marianne Fallon, UK head of corporate affairs at KPMG, commented: “What is clear from our report is just how big and messy our housing problem is.
“However, our report shows that a government which is prepared to roll up its sleeves and commit to a programme to tackle each element of the problem, over a parliament and beyond, has the chance to make home ownership a realistic dream again.
“Three examples of bold moves which could meaningfully shift the status quo include empowering local authorities to create ‘new home zones’, which could generate over 8,000 additional homes per year; increasing the diversity of the building industry through ‘Help to Build’ funding to support SMEs and giving local authorities more borrowing power to build. As the housing crisis rises in the consciousness of the electorate, there could be political prizes for those who are prepared to throw their arms around this large and complex issue.”
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