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Home Ownership

Volume 785: debated on Tuesday 17 October 2017


Asked by

To ask Her Majesty’s Government what percentage of the United Kingdom population own their home either outright or with a mortgage; and what assessment they have made of whether this figure may increase or decrease in future.

My Lords, in 2015-16, the latest year for which data are available, 34% of households in England owned their home outright, while 29% bought their home with a mortgage. DCLG does not hold data for the United Kingdom. After falling from 71% in 2003, the percentage has stabilised at 63% from 2013 to 2016.

With home ownership at a 30-year low and more young people than ever before priced out of the mortgage market, is the Minister aware of the work undertaken by the Building Societies Association, which has highlighted that one in four people whose borrowing extends beyond the age of 65 is a first-time buyer? What more will the Government do to help the teacher, the classroom assistant, the small- business person, the firefighter or the police officer who in their 30s are all too often priced out of the market, particularly in London, with the various government schemes not helping to date?

My Lords, as I have indicated to the noble Lord, the position has stabilised over the past few years and barely changed—in fact, it has become slightly better during the past year with the percentage having fallen from 71% in 2003. The noble Lord will be aware, as the House is aware, that the Government are taking many measures to extend home ownership but also to diversify the tenure of houses—£2 billion was announced earlier this month, much of which will go on social rent. We are extending home ownership but at the same time seeking to diversify supply, because the noble Lord is right that this is a serious challenge. As he has indicated, there is a serious intergenerational problem that we wish to address.

My Lords, in the last financial year, private builders built 121,000 new homes in England, housing associations built 25,000 and local authorities built 1,840. The Government admit we need to build at least 275,000 homes every year just to prevent prices rising. Private builders will not build any more than they do; housing associations can maybe build 50,000 a year—that means local authorities will have to build 85,000 each year. How will the Government enable them to raise the money to do that?

My Lords, as I have indicated, the Government have just announced £2 billion, and we will be shortly explaining precisely how that money will be spent. Much of it will be going on social rent. We have committed to 1 million new homes by 2020, and 1.5 million new homes—a further half a million—by 2022, which are needed to meet the challenge. It is a far better performance than we have had in recent years. There is a massive challenge here and the Government are aware of this. Part of it is also answered by something that we announced fairly recently: building homes in the right places and ensuring that more of them are built where there is the greatest need and the greatest pressure.

My Lords, for those of us who began our political careers campaigning for a property-owning democracy, the figures my noble friend has given are somewhat disappointing. It is encouraging that the Government are seized of the issue of intergenerational unfairness which exists at the moment and I look forward to the measures that may perhaps be brought forward in the Budget, but does he not agree that it is not only in respect of difficulties in buying their own home that the young are disadvantaged but in a whole host of other financial aspects, including saving for pensions?

My noble friend is right. The intergenerational fairness to which I referred does not apply just to housing; there is a similar issue in relation to pensions. A lot of work has been done on this, and the Government are looking at it very seriously. He is right that we need to do far more. I should point out that this is against an expanding population so, although the percentage is static at the moment, that still means we need an increased number of homes because the population is still expanding. Yes, there is a massive challenge and the intergenerational fairness issue is not limited to questions of housing.

My Lords, the Minister says that the Government are seeking to diversify supply, but surely they are not doing nearly enough to increase supply. If Harold Macmillan, as Housing Minister, was able to build 300,000 houses a year in the early 1950s in a country far poorer than ours is today, why can the Housing Minister in today’s Government not do as well or better?

The noble Lord is right about the size of the challenge but I think, in fairness, he should acknowledge that the £2 billion recently announced begins to address the sort of issue that we are looking at. It is not about just extending home ownership, although the Government are committed to that; it is about diversifying supply, and that £2 billion, in addition to the money that is already there, will make a considerable difference.

My Lords, does the Minister agree that we have heard an awful lot about the supply of housing, but there are also some important questions to be asked about demand? He mentioned population; 50% of the projected population growth is down to immigration and we should not be blind to that. Furthermore, of the new households created in the past 10 years, about 90% had a head of household who was born overseas. It is a big factor. We should face up to it.

My Lords, I am certainly not going to deny the population growth. The facts are there for people to see. That is undoubtedly the case. But it is not a question of simply saying that there is too much demand and we need to stop immigration. The noble Lord did not suggest that, I know, but that would not be the way of proceeding. We have all sorts of skills shortages in many parts of the economy and we have to take account of those when we plan for population growth in the country.

My Lords, the Minister will be aware that Help to Buy has assisted quite a number of young people to buy their first home, but is he aware of the research which now shows that Help to Buy is actually helping to increase house prices, putting home ownership beyond the reach of many more people?

My Lords, the noble Lord alludes to the need to ensure that younger people can buy their own homes. That is indeed very important. It is part of the intergenerational question that I referred to. The Government have many schemes that will assist people. Notably, lifetime ISAs are making a considerable difference now. Yes, it is a challenge and something we are looking at. The evidence he spoke of is actually ambiguous—it is not clear that that is the case—but we are looking at ways of encouraging younger people into the market because it is important that we do so.