That is according to the Department for Communities and Local Government’s (DCLG) Affordability and the Supply of Housing report, which states there needs to be a drive to recoup the shortfall in housing supply.
The government has tried to help FTBs with schemes such as HomeBuy and low-cost homeownership projects, but these are doomed to failure in the report’s eyes because of the ‘very significant losses in social housing’ over the last 15 years.
The report said: ‘Schemes that subsidise homeownership without increasing the supply of housing risk contributing to increasing house prices. We recommend that the government ensure all low-cost home ownership schemes operate in such a way as to support increases in overall housing supply rather than intensifying pressure on the existing supply.”
However, the report also said the affordability of homes would continue to be a problem even if a large number of homes were built.
This, it believed, won’t be an issue though as the government’s target of building 200,000 new homes by 2016 won’t be enough to keep up with demand.
The report added: “The government’s objective to raise the net number of additional homes by 200,000 by 2016 may not be sufficient to keep pace with the latest household growth projections. The projections suggest that, unless house-building rates increase, there will be significant shortages in the future.”
Daniel Clayden, director of Clayden Associates, agreed: “There is definately a link between the shortage of properties for FTBs and the reduction in social housing. Currently, homes may be affordable initially but once they come up for re-sale on the open market, they aren’t. The only thing that would help is a correction in house prices.”
