The Redfern Review, an independent assessment of the decline of homeownership, has now been released, after being commissioned in February by the Labour Party.
Led by Pete Redfern, the Chief Executive of housebuilder Taylor Wimpey, the report reviews the state of the property market in the UK and how this has created the current housing crisis. The full study can be accessed here: http://www.redfernreview.org
Fortunately, Redfern’s review isn’t obviously stuffed with measures that would benefit housebuilders.
Does the Redfern Review Have Any Real Solutions to the Housing Crisis?
For example, it doesn’t recommend that the Government throw yet more schemes at homebuyers, in the style of the former chancellor, George Osborne. Instead, the Redfern Review states that Help to Buy schemes are inflationary and should be restricted to first time buyers seeking lower-priced homes.
And the report doesn’t simply focus on homeownership either.
“A fair housing market also needs both a healthy private rented sector and a supportive social housing sector,” it insists.
Over the past 30 years, past governments’ focus on homeownership has deprived local authorities of the funds needed to build affordable homes to rent. Positively, the review argues that all tenure types require equal support.
Disappointingly, however, the report does not offer fresh insight into why homeownership levels dropped by 6.2% between 2002-14. The main finding is exactly as you’d expect: Fewer young people can afford to buy their own homes. Also unsurprisingly, it confirms that house prices rose rapidly before the banking crisis, credit constraints then kicked in, and incomes of those aged 28-40 have declined in relation to older people.
But Redfern does have one original suggestion: Set up an independent housing commission, modelled on the new Infrastructure Commission, to provide long-term thinking on housing. Although this does not provide an instant resolution to the housing crisis, it does highlight the fact that longer-term plans must be put in place to sustain the supply of homes.
While Labour commissioned the report, Theresa May could use its suggestions to form a new housing policy that may indeed go some way to resolving the crisis.
The Policy Manager of Generation Rent, a tenant lobby group, Dan Wilson Craw, responds to the findings of the Redfern Review: “The decline in homeownership is creating significant problems for the future, particularly once renters reach retirement age and depend on the state to put a roof over their heads. The solution is not to load first time buyers with more debt, but to restrain house price inflation so wages can catch up.
“The desperation of private renters to escape their expensive, unstable tenure makes subdued first time buyer numbers a bigger problem than it ought to be. Alongside investment in new homes, the Government should reform renting so it offers tenants stable homes and a genuine choice of tenure.”