Stephen Hammond is the Member of Parliament for Wimbledon and a senior member of the One Nation caucus of Conservative MPs.
The Conservative dream is one with home ownership at its core. For decades our party has championed those who believe that if you work hard, you should have the opportunity to own your own home.
Without a sense of ownership and stake in your society, unity and pride – which are essential for local areas to thrive – of place is quickly lost.
Sadly, for millions, this aspiration has disappeared and owning their own home is out of reach. This needs to change. Levels of home ownership are falling up and down the country, particularly among young people.
In 1980, nearly fifty percent of 18-34-year-olds in the UK and the US lived independently. Today, only one in five of this age group own a home, with most 18-34 year olds still living with their parents.
However, I do not believe that this generation lacks any aspiration to own a home. Indeed, the evidence suggests the contrary. But there are new challenges facing them, including supply, affordability and demand.
The cost of buying a home has risen far faster than wages in the last twenty years, leaving many workers priced out of the market. Last year, the average house price for first-time buyers was £218,500, 270 per cent of the average house price in 1983. The average mortgage is now nine times the average salary and, more often than not, lenders require a ten per cent deposit, meaning that people require significantly larger deposits in order to secure a mortgage and consequently more time to save for them.
The supply issue is simple: not enough housing is being built.
According to the National Housing Federation, around 340,000 new homes need to be supplied in England each year, of which 145,000 should be affordable. Despite government targets, there is a shortage of homes; one in six young people are living in poor-quality housing, and the waitlist for affordable homes has surpassed one million.
It is universally acknowledged that we need to build more homes. We should encourage supply side measures, such as Michael Gove’s recent announcement to turbocharge development on brownfield sites, which was widely welcomed by the One Nation caucus. But we need to do more, quickly.
As part of efforts to do so, the Chancellor should use this week’s Budget to announce that for the next four years, if local authorities build and sell 100 per cent of their advisory targets, they’ll be able to keep 15 per cent of the stamp duty of the homes sold. If built and sold homes match 125 per cent of their advisory target, then they will keep 25 per cent of the stamp duty.
We must also address the difficulties millions face when trying to raise the capital needed and secure a deposit. The auto-enrolment age means more individuals have control of their own pensions, with both individual and corporate contributions.
Some flexibility on the use of that pension might allow more people to buy their own homes. Jeremy Hunt should allow first time buyers to put up to 25 per cent of their pension savings tax-free into the deposit required for their first home.
Finally, by abolishing stamp duty for buyers looking to downsize, we will ensure people won’t be punished for moving to a smaller home, better-suited to their needs later in life. In turn, this will free up bigger homes for budding families.
We would also recommend helping pay for these with a levy on foreign owners of vacant luxury flats, bought for investment purposes, as these represent an increasing section of the market, especially in our cities like London.
The impact of not owning your own home is far-reaching. It is not only the lack of physical space that harms individuals, but they also often feel that they do not have a stake in their community or society. They are less willing to invest in the local area or put down roots, when they don’t know how long they will be staying in the neighbourhood for.
This causes people to postpone having families, or not have them at all. It has drastic impacts on our economy too, pushing people away from productive areas and widening regional inequalities of wealth.
We believe that the dream of home ownership should never be out of reach for hard working people across the country. We have a duty to restore the aspiration of home ownership for the younger generations, and be the party of One Nation – not two nations who are split down a generational line, where the young have been pushed to the periphery.
Home ownership is a fundamental cornerstone of conservatism, and everyone must be given the opportunity to reach this life milestone through hard work and determination.
Stephen Hammond is the Member of Parliament for Wimbledon and a senior member of the One Nation caucus of Conservative MPs.
The Conservative dream is one with home ownership at its core. For decades our party has championed those who believe that if you work hard, you should have the opportunity to own your own home.
Without a sense of ownership and stake in your society, unity and pride – which are essential for local areas to thrive – of place is quickly lost.
Sadly, for millions, this aspiration has disappeared and owning their own home is out of reach. This needs to change. Levels of home ownership are falling up and down the country, particularly among young people.
In 1980, nearly fifty percent of 18-34-year-olds in the UK and the US lived independently. Today, only one in five of this age group own a home, with most 18-34 year olds still living with their parents.
However, I do not believe that this generation lacks any aspiration to own a home. Indeed, the evidence suggests the contrary. But there are new challenges facing them, including supply, affordability and demand.
The cost of buying a home has risen far faster than wages in the last twenty years, leaving many workers priced out of the market. Last year, the average house price for first-time buyers was £218,500, 270 per cent of the average house price in 1983. The average mortgage is now nine times the average salary and, more often than not, lenders require a ten per cent deposit, meaning that people require significantly larger deposits in order to secure a mortgage and consequently more time to save for them.
The supply issue is simple: not enough housing is being built.
According to the National Housing Federation, around 340,000 new homes need to be supplied in England each year, of which 145,000 should be affordable. Despite government targets, there is a shortage of homes; one in six young people are living in poor-quality housing, and the waitlist for affordable homes has surpassed one million.
It is universally acknowledged that we need to build more homes. We should encourage supply side measures, such as Michael Gove’s recent announcement to turbocharge development on brownfield sites, which was widely welcomed by the One Nation caucus. But we need to do more, quickly.
As part of efforts to do so, the Chancellor should use this week’s Budget to announce that for the next four years, if local authorities build and sell 100 per cent of their advisory targets, they’ll be able to keep 15 per cent of the stamp duty of the homes sold. If built and sold homes match 125 per cent of their advisory target, then they will keep 25 per cent of the stamp duty.
We must also address the difficulties millions face when trying to raise the capital needed and secure a deposit. The auto-enrolment age means more individuals have control of their own pensions, with both individual and corporate contributions.
Some flexibility on the use of that pension might allow more people to buy their own homes. Jeremy Hunt should allow first time buyers to put up to 25 per cent of their pension savings tax-free into the deposit required for their first home.
Finally, by abolishing stamp duty for buyers looking to downsize, we will ensure people won’t be punished for moving to a smaller home, better-suited to their needs later in life. In turn, this will free up bigger homes for budding families.
We would also recommend helping pay for these with a levy on foreign owners of vacant luxury flats, bought for investment purposes, as these represent an increasing section of the market, especially in our cities like London.
The impact of not owning your own home is far-reaching. It is not only the lack of physical space that harms individuals, but they also often feel that they do not have a stake in their community or society. They are less willing to invest in the local area or put down roots, when they don’t know how long they will be staying in the neighbourhood for.
This causes people to postpone having families, or not have them at all. It has drastic impacts on our economy too, pushing people away from productive areas and widening regional inequalities of wealth.
We believe that the dream of home ownership should never be out of reach for hard working people across the country. We have a duty to restore the aspiration of home ownership for the younger generations, and be the party of One Nation – not two nations who are split down a generational line, where the young have been pushed to the periphery.
Home ownership is a fundamental cornerstone of conservatism, and everyone must be given the opportunity to reach this life milestone through hard work and determination.