Without a radical programme of house building average house prices in England could double in just ten years to £446,000, according to new research released in May.
In twenty years they could quadruple, with the average house price estimated to rise to over £900,000 by 2034 if current trends continue.
The research from KPMG and Shelter also reveals that, more than half of all 20-34 year olds could be living with their parents by 2040, as soaring housing costs caused by the shortage of affordable homes leave more and more people priced out of a home of their own.
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. 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.
The report 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.
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. For many people, particularly those in their twenties, the aspiration of owning their own ‘castle’ is fast becoming a fairy tale. 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.”