House Prices: Demand Changes, Not Tax Waiver, Pushed Prices Up

The current house prices boom was not caused by the stamp duty holiday, a new report has argued. The Resolution Foundation says prices will keep rising because of pandemic-related factors like low interest rates and changing home preferences. In fact, the think tank says the tax holiday was "wasteful" and HMRC lost out on about £4.4bn of taxes in England and Northern Ireland as a result. The Treasury said the policy saved jobs by stimulating the housing market. Between June 2020 and June 2021, the average value of a UK home increased 13.2%. Read more on the BBC website.

https://www.bbc.co.uk/news/business-58274811 

450,000 Families ‘Behind On Rent Because Of Covid’

Almost half a million UK families are thought to have fallen behind on rent, as a result of the coronavirus crisis, according to the Resolution Foundation. It said more than 750,000 had been behind on housing costs last month. That is 450,000 more than January 2020. "Despite widespread calls for forbearance in the face of the Covid-19 shock, just 3% of private renting families have been able to negotiate a lower rent over the last 10 months," the think tank said in a report. Meanwhile, one in 20 private renters in the UK said they had been refused rent reductions. Read more on the BBC website.

https://www.bbc.co.uk/news/business-56075518 

Covid-19 Hinders Government Hitting 'Ambitious' Target For New Homes

Covid-19 has knocked the government further off course from its housebuilding targets, a study has revealed, with only 94,000 new homes built during the first nine months of 2020. The first wave of coronavirus led to the temporary closure of construction sites last spring, leaving output well below the 300,000 new homes a year which the Conservatives pledged in their manifesto, according to research by the Resolution Foundation thinktank. The government aims to deliver a million new homes by the end of the parliament, a target the Foundation described as “highly ambitious” even before the pandemic. Read more on the Guardian website.

https://www.theguardian.com/uk-news/2021/feb/02/covid-19-hinders-government-hitting-ambitious-target-for-new-homes

No Silver Lining For UK First-Time Home Buyers Even If Prices Collapse

First-time buyers in Britain will struggle to get on the property ladder even if the coronavirus recession triggers a collapse in house prices, a leading thinktank has warned. Sounding the alarm after Britain’s economy plunged into the deepest recession since records began, the Resolution Foundation said house prices could fall by more than a fifth by summer next year. It said although this might sound as if it should benefit young adults looking to get on the property ladder, first-time buyers would struggle because the Covid recession would also drag down their incomes while banks made it harder to get a mortgage. Read more on the Guardian website.

https://www.theguardian.com/money/2020/aug/13/no-silver-lining-for-first-time-home-buyers-even-if-prices-collapse

Social Renters Most Affected By Coronavirus

The Resolution Foundation says four in five social housing tenants either work in sectors directly hit by the government-imposed lockdown such as hospitality and retail, are unable to work from home, or must care for school-aged children. Only half of homeowners are in similar situations, it added, with the figure 59% for private renters. Staying home to help slow the spread of the virus will also “be particularly challenging” for the UK’s 1.8 million families living in overcrowded conditions – with 13% of social rented households affected compared to 10% of private renters and just 2% of owner-occupiers. Read more on the Resolution Foundation website.

https://www.resolutionfoundation.org/publications/housing-outlook-q2-2020/

Single Parents Have To Work Seven Hours A Week More To Stay Out Of Poverty

Single parents have to work seven hours more each week than they did 10 years ago to stay above the poverty line due to the effect of benefit cuts, a new report exploring in-work poverty has found. The report, published by the Resolution Foundation, found that poverty rates fall from 35% to 18% when people move into work – but even sustained employment does not eliminate in-work poverty for many households. Almost seven in 10 working-age adults living in poverty today are either working themselves or living in a household where someone else does, up from fewer than five in 10 two decades ago. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/news/benefit-cuts-mean-single-parents-have-to-work-seven-hours-a-week-more-to-stay-out-of-poverty-report-finds-64931

House Prices Have ‘Levelled Up’ Across The Country Since The Vote To Leave The EU

The long-run story of the UK’s housing market is a widening gap between prices in different parts of the country (think the North East compared to London). But all stories have to end. Since mid-2016, house prices in the nations and regions of the UK have stopped diverging, and instead have ‘levelled up’ to a significant degree. Has this levelling up run its course, or does it have further to go? For example, the average house price has risen by just 0.5 per cent in Inner London since mid-2016 (just £2,700 in cash terms), while in the West Midlands house prices have risen by almost a quarter (equivalent to £36,000). Read more on the Resolution Foundation website.

https://www.resolutionfoundation.org/publications/housing-outlook-q1-2020/

High Rents In English Cities Forcing Young To Stay In Small Towns

One of the defining patterns of English life in which young people move from small towns with limited prospects to bigger cities to seek their fortune is in dramatic decline. More young people are getting stuck where they grew up or went to university because they cannot afford rents in places where they can earn more money, according to the Resolution Foundation. It found the number of people aged 25 to 34 starting a new job and moving home in the last year had fallen 40% over the last two decades. Whereas previous generations were able to move to big cities to develop their careers, the current millennial generation is enduring a slump in mobility caused by rising rents, which can wipe out the financial gains of a move. Read more on the Guardian website.

https://www.theguardian.com/society/2019/jun/06/high-rents-in-english-cities-forcing-young-to-stay-in-small-towns

Easing The Housing Headache

No doubt about it, housing is a headache for many young people today. The dramatic fall in the home ownership rates of the under-35s often produces the sharpest pangs for politicians. But there are other sources of pain as well. Just as ownership rates have collapsed, so too has the share of young people that live in social rented homes (from 22 per cent in 1981 to just 10 per cent in 2018). As a result more than one in three young families live in the private rented sector today, the least secure and lowest quality tenure of all. Read more on the Resolution Foundation website.

https://www.resolutionfoundation.org/media/blog/easing-the-housing-headache-what-the-chancellor-should-do-in-next-weeks-budget/

Stamp Duty Cut Could Cost First-Time Buyers Twice As Much As They Save

The stamp duty cut for first-time buyers could cost those purchasing a home more than twice as much as it saves them, a think tank has claimed.  The Resolution Foundation said the policy will inflate house prices by more than the saving it will deliver for many buyers. It added that the change will only marginally reduce the time it takes an average first-time buyer to save up to buy a property – from 19 years to 18.5 years. It also said the rise in house prices that the policy is likely to cause equates to a £3,200 increase in the cost of an average-price home – more than double the average £1,600 saving it will deliver. Read more on the Independent website.

Reverse Cuts Or Backing For Universal Credit May Collapse

Public confidence in universal credit will collapse without an urgent £3bn cash injection to reverse cuts that are set to leave millions of families worse off, an influential thinktank has warned.  The Resolution Foundation says a spree of Treasury-driven welfare cuts since 2015 has left universal credit unable to meet its original aims of strengthening work incentives and supporting the incomes of low-income families. It warns that the current fragile political consensus in support of universal credit risks breaking down unless ministers refinance the reform and fix multiple design and implementation problems. Download a copy of Universal Remedy: ensuring Universal Credit is fit for purpose from the Resolution Foundation website.

Young People Hit By Spending Squeeze As Falling Incomes And Rising Housing Costs Take Their Toll

Young people have experienced the tightest squeeze on household spending since 2000 and now consume 15 per cent less than older working age people on items other than housing, according to a new report by the Resolution Foundation. The finding of a consumption ‘youth deficit’ is in stark contrast to common claims that today’s young are spending like there’s no tomorrow and mark a major turnaround from the recent past when earlier generations experienced a ‘youth premium’. Consuming Forces  tracks the spending patterns of different age groups since the 1960s to see how changes in earnings and incomes have fed through into what people spend their money on from week to week. Read more on the Resolution Foundation website.

Government Buying Into Affordable Homes

The Government has bought into affordable housing to win over young voters. Chancellor Philip Hammond asked a private meeting of Tory backbench 1922 committee for ideas to bridge the widening  gap between voting generations. Housing emerging as an obvious issue upon which ground could be gained where young voters were concerned as to their prospects. The government was reinforced by a visit from Lord Willetts, a former Tory cabinet minister who chairs the Resolution Foundation – a think-tank focused on improving living standards – to Downing Street and meeting with head of policy James Marshall. Read more on 24housing.

Looking For House And Home

You can normally get a good feel for changing political priorities by tracking how often the parties refer to particular issues over time. Search for ‘house’ and ‘home’ in the manifestos of the two main parties and in 2001 neither term got much of a look-in. Today references to both are legion. If we quite literally take the parties at their word, whoever forms the next government looks set to give housing the prominence it deserves (and that voters clearly think it should have too). The Conservatives reiterate their 2015 commitment to deliver 1 million homes by 2020 and promise a further half a million by 2022; Labour also sign up to build the magic million. Read more analysis on the Resolution Foundation website.

Why Big Drop In Home Ownership For Young Families Is Worrying

Home ownership for young families has halved in some of Britain's leading housing markets since the 1990s. The phrase "housing crisis" is rarely off politicians' lips these days as they increasingly recognise the cost of a home - to buy and to rent - plays a key role in determining living standards. And quite right too as new Resolution Foundation analysis shows the crisis is both acute and widely felt. Home ownership levels among today's young families are way below those enjoyed by their parents' generation. Read more on the Resolution Foundation website.

Official Figures Overstate UK Home Ownership

Barely half of all families in Britain own their own home, research highlighting the extent of the rise of generation rent shows. A study by the Resolution Foundation thinktank has shown that official figures have exaggerated home ownership, which has been in steady decline since 2002. The ONS said the UK owner occupation rate rose sharply in the two decades after Margaret Thatcher’s government allowed council tenants the right to buy their homes at a discounted price. But since the early 2000s, high house prices, weak growth in real incomes and tighter lending policies have combined to make home ownership harder despite a prolonged period of ultra-low interest rates and government subsidies for first-time buyers. Read more on the Resolution Foundation website.

Focus On The Power Of Government Is An Opportunity For Private Renters

In her conference keynote speech Theresa May reaffirmed her commitment to help struggling, working class people. Back in August, in her first speech as Prime Minister, she vowed to make Britain a “country that works for everyone” and putting “the power of government squarely at the service of ordinary working class people”.  A recent report by the Resolution Foundation suggested that a quarter of the households that the prime minister has in her sights are private renters. It also shows that of the ‘just managing’ the private renters are finding it most difficult to manage of all, because they’re struggling with the highest ongoing housing costs – as well as extra costs like letting fees. Read more on the Shelter blog.

Home Ownership In England At Lowest Level In 30 Years

Home ownership in England has fallen to its lowest level in 30 years as the growing gap between earnings and property prices has created a housing crisis that extends beyond London to cities including Manchester. The struggle to get on the housing ladder is not just a feature of the London property market, according to a new report by the Resolution Foundation thinktank, with Greater Manchester seeing as big a slump in ownership since its peak in the early 2000s as parts of the capital, and cities in Yorkshire and the West Midlands also seeing sharp drops. Home ownership across England reached a peak in April 2003, when 71% of households owned their home, either outright or with a mortgage, but by February this year the figure had fallen to 64%. Read more on the Resolution Foundation website.

The Impact Of Rising Housing Costs On UK Living Standards

This report explores the question of how incomes and housing costs have interacted over time. It asks a seemingly simple question: how affordable has housing been for different groups in the UK over the last two decades? Through this exercise, we show how housing costs have (or have not) contributed to living standards at different points in time, and identify who may be vulnerable to continued housing pressure over the course of this parliament. Download the report from the Resolution Foundation website.

Rising Housing Costs Equal To 10p Increase In Basic Rate Of Tax

The rising share of income spent on housing over the last two decades is equivalent to a 10p increase in the basic rate of tax for a typical family, according to new Resolution Foundation analysis. The analysis finds that the share of income spent on housing costs was stable for most of the 1990s and early 2000s at around 17 per cent. However, a wedge opened up in the mid-2000s as rising housing costs outstripped income growth. By the eve of the financial crash, the average working age household spent around a fifth of their income on housing. This housing affordability wedge then shrank in the wake of the crash as interest rates were cut to record lows and house prices fell. For many households this fall helped soften the post-crash living standards squeeze by reducing mortgage costs. However with rising housing costs once again outstripping income growth, the Foundation warns that housing risks being a major brake on the UK’s living standards recovery. Read more on the Resolution Foundation website.