Good News For Would-be Young Homeowners
It’s more of a trickle than a torrent, but home ownership has increased among 25-34 year-olds for the first time in 30 years. Figures from the Resolution Foundation put the increase at 3 percent, taking the proportion to 28 percent, from its 2016 figure of 25 percent.
If you like the idea of citizens owning property and having some degree of independence from government, this is good news, even though the proportion is still only half of the 1980s figure. For many, renting remains the norm, having gone from 9 percent in the 1980s to its current 34 percent.
The main problem has been the Town and Country Planning Act, no longer fit for purpose, and preventing houses being built on the large swathes of the green belt that are not in fact green. Another may have been the fact that incomes have risen very slowly for many people in the ten years since the Financial Crisis, and have not kept pace with inflation in house prices.
The Resolution Foundation’s Daniel Tomlinson says:
“Home ownership politicians should act to increase the number of homes available to buy, use the tax system to favour first-time buyers over second-home owners, and ensure that the private rental sector is fit for purpose – providing the security that many young families need.”
He’s partly right, in that the priority should be to have many more houses built, not affordable ones, just houses. Someone moving into an expensive house vacates a cheaper one, and so on until an affordable one becomes vacant. Using the tax system to favour first-time buyers runs the risk of pushing up prices by increasing demand ahead of supply. And yes, we should enable and facilitate 3-year contracts for private rentals, to give both tenants and landlords the security of longer-term relationships.
Yes, it’s only a trickle, but it’s in a good direction. Now let’s build enough to turn it into a torrent.