Chris Chope is Member of Parliament for Christchurch.
Our housing market is broken. Since 2003, the percentage of home owners has fallen from 71 per cent to 64 percent, and for the first time ever over half of 25-34 year olds find themselves stuck in private rental accommodation with little chance of getting a foot on the housing ladder. Our job is to ensure there are sufficient homes to enable these people to access secure affordable housing and give them a chance to put down roots in their local communities. The Government’s response to the Housing White Paper consultation and the Chancellor’s Autumn Budget are golden opportunities for us to get to work and make this happen.
We have got part of the answer right. The mooted Stamp Duty holiday for first time buyers would help many renters access the property ladder, while the extension of Help to Buy gives much needed financial support. Localis’s Disrupting the Housing Market report shows that a staggering 58 per cent of people who do not own their own home aren’t able to save anything at all towards a deposit versus just 23 per cent who do. With inflation on the rise and wages remaining stagnant, this problem will likely be further compounded. The questions then arises: how can we help more people overcome the deposit barrier to homeownership?
The £2 billion of new funding, announced at Party Conference, to fund the delivery of more affordable housing will rightly go to those in greatest need. However, there is a gap – the people needing our support are those families who are just about managing. They earn just enough to keep their heads above water, but not enough to change their circumstances, take charge of their futures and buy a home of their own.
Innovative and radical solutions are urgently needed to help these people and we must consider rolling out new tenure types at scale. I am fully behind Sajid Javid’s intervention last Sunday calling on the Chancellor to underwrite the delivery of affordable rent-to-buy housing across the country in the upcoming Budget. The Communities Secretary is right to support this model. It offers those just about managing families and working people the security of long-term tenancies plus the chance to purchase their own home.
Additional Government funding is welcome and will certainly go a long way, but I believe that Javid is missing a trick by not considering the role institutional investment could play in augmenting the delivery of these homes. Indeed, in his department’s White Paper they called specifically for new ways in which to channel private finance into the affordable housing sector. We do not need to rely solely on the public purse to fund the delivery of these homes. With some policy tweaks we could release significant private investment into this model, too. From conversations I’ve had with businesses delivering affordable rent-to-buy on the ground, up to £40 billion of private investment for the model could be available, funding hundreds of thousands of homes for working families.
To unlock this money we need to change our National Planning Policy Framework. That is why I tabled a Ten Minute Rule Bill today that calls for the National Planning Policy Framework to include a clear definition of affordable rent-to-buy and give it Government backing. This will provide the confidence needed for local authorities to accept such innovative schemes as part of s106 affordable housing planning requirements on new developments. In addition, the Bill also calls for affordable rent-to-buy to be included as part of the affordable housing commitment on new schemes, and for there to be a Stamp Duty holiday for people purchasing through affordable rent-to-buy. I urge all my colleagues across the House to sign-up to it.
One organisation which is already delivering affordable rent-to-buy on the ground is Rentplus. Their model offers working families long-term, secure, five-year renewable affordable tenancies for up to 20 years. They also support people to buy their home with a ten per cent gifted deposit to add to their own savings. Evidence from their developments also shows that up to 60 per cent of tenants were on housing waiting lists and up to a third were previously living in social housing, highlighting that affordable rent-to-buy frees up council stock for those most in need.
In the Autumn Budget I believe the Chancellor should seize the opportunity to deliver a radical fix to our housing market. He should back Javid’s plans for the roll-out of affordable rent-to-buy, unlock the current barriers to channelling private funding into the model and give working families and those just about managing the chance to fulfil their dream of homeownership.