Reboot: building a housing market that works for all
The UK has entered a housing market downturn, sparked by higher inflation and interest rates. This is already having far-reaching consequences for individuals, the housing system and the wider national economy. Any Government response must recognise the deeper weaknesses in our housing system.
This report draws on detailed analysis of past housing market downturns and current market conditions to argue the downturn is likely to manifest in four key areas:
- A slowdown in housebuilding.
- An investors' market.
- Serious impacts on vulnerable groups.
- Expectations of future house price inflations suppression transactions.
House price inflation on the scale we have seen over the last 20 years is fundamentally incompatible with rising homeownership and better housing outcomes. It’s also the driver of our dysfunctional housebuilding system, poverty, wealth inequality and wider economic distortions that result from ploughing so much of our national wealth into housing market speculation.
It is time to wean the UK off its addiction to house price growth so new generations can benefit from the security and sense of autonomy homeownership can bring. Saving these ‘good’ aspects of homeownership means starting to separate them from the speculative wealth accumulation that has attached itself to homeownership in recent decades.