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					                          Discussion Brief Number 4/2011


This Conservative Policy Forum Discussion paper considers three aspects of future housing

    Part A      Home ownership
    Part B      Household composition and housebuilding requirements
    Part C      Assessing relative housing priorities

Another important policy area is housing choices for older people and elderly care. That will
be the subject of a specific discussion paper in the CPF Autumn season.

There is a response form containing the questions sent with this discussion paper.

Part A - Home Ownership

For many people, buying a home represents home security and is an opportunity to create
housing wealth. Under the last Labour government home ownership began to decline. It
reached the lowest figure for two decades, at 67.5%, in 2009/10. This position reverses all of
the growth in owner occupation made since 1991.

Previous Conservative governments have introduced a range of initiatives to encourage home
ownership: the right-to-buy for council housing, which helped more than 2.2million people
into home ownership; ‘MIRAS’ tax relief, which helped reduced mortgage costs; and married
tax allowances.

In recent years, low income households and young people without the ‘bank of mum and dad’
have found it hardest to get on the housing ladder. Analysis from the Council of Mortgage
Lenders has found that in 2009 84% of young people under 30 received help from a friend or
relative to obtain a mortgage. This was a significant increase from 38% in 2005. Average
mortgage deposits are about £26,500 in 2011, up from £12,500 in 2007. The basic mortgage
deposit now represents around 87% of a person’s median salary rather than 41% in 2007.
Due to increased day to day housing costs and living costs, many people are finding it
impossible to save for a deposit to get a mortgage and get on the housing ladder.

The recent decline in home ownership has been accompanied by an increase in private rented
accommodation. Renting offers no opportunity to acquire housing wealth. Private renting
offers a less secure long term occupancy option than either home ownership or social renting
(i.e. a council or housing association tenancy). This is illustrated by tenure and residency
length statistics from the Department of Communities and Local Government (Table 802):

                Tenure Type                         Length of residence (Median)

                All tenures                   8.9 years
                Owned outright (no mortgage) 23.6 years
                Owned (with mortgage)        7.1 years
                Social rent                  7.8 years
                Private rent                 1.7 years.


                     Conservative Policy Forum, 30 Millbank, London SW1P 4DP

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Questions for discussion:

(1)        What should government be doing to encourage home ownership in 2015?

(2)        What should government be doing to encourage a healthy private rented sector in

(3)        If tax or other government financial support was available for housing in 2015, who
           should such support be directed at and why?

Part B - Household composition and housebuilding requirements

Household Composition

The composition of a household affects how we use our current homes and how many new
homes are needed. In 1961 an average of 3 people shared a house. By 2006 there had been a
steady decrease in household size to a ratio of 2.32 people sharing a house. This is projected
to decrease to 2.13 people by 2031.

Social policy impacts on the composition of a household and therefore housebuilding
requirements. Under the previous government it was projected that households in England
would continue to rise, by nearly 10million in the period to 2031. 65% of the additional
housing need would be required by one person households, representing a 60% increase in the
number of this type of household. Cohabitating couples are projected to increase by 74%,
representing more than a quarter of the households by 2031.

      Households Projections to England 2031, Statistical release 11 March 2009¸


                             Conservative Policy Forum, 30 Millbank, London SW1P 4DP

                              What challenges do you think Britain will face in 2015?
                             Join the discussion at

An example of the difference which social policy can make to household composition and
housing need is illustrated in the following adjusted table. This demonstrates that a projected
range of required households can vary by more than 5.5million homes:-
                                            Average          Estimated             additional   Type of housing
                                            household size   Households-         composition
                                                             from estimated population of
                                                             59.23     million    by   2031
                                                             (assessed from 21.5 million
                                                             households in 2006)

Projected continued increase in social      2.13             6,300,000                          4million    more    single
breakdown and increase in sole occupation                                                       occupancy flats
(National Statistics)

Status quo (using 2006 as base)             2.32             4,030,000

Average position density (1988 position)    2.51             2,097,000

‘Mending the broken society’ (pre 1988      2.65             850,000                            More family and larger
position)                                                                                       multi occupancy housing

Housing need range:-                                         Between       800,000       and

Questions for Discussions:-

(4)         What are the main social and economic factors which will impact on
            household size and housing needs by 2015?

(5)         In your area, how do you see housing requirements changing by 2015? (e.g. by
            number, type of housing, occupant etc)

Relative Priorities for Housing

There are a number of different, and sometimes conflicting, housing priorities to balance in
developing housing policy for 2015.

Question for Discussion

(6)         Please discuss and rank the higher priority and lower priority housing issues for your
            area by reference to (i) priority in 2011 and (ii) if different, anticipated priority in

      •     Mortgage availability
      •     Getting on the Housing Ladder

                            Conservative Policy Forum, 30 Millbank, London SW1P 4DP

                              What challenges do you think Britain will face in 2015?
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   •   Supporting home ownership for low income families
   •   Supporting home ownership for young people
   •   Housing costs
   •   Quality of private rented accommodation
   •   Reducing homelessness and overcrowding for social tenants
   •   Affordability of student housing
   •   Fair equity release
   •   Housing options for older people
   •   Honouring the military covenant: housing ex-armed forces and their families
   •   Improving access to social housing
   •   Protecting the environment
   •   Energy efficient homes
   •   Other (please specify)

Further Reading and Resources

   o DCLG Live Tables: extensive resources for all aspects of housing -

   o A critique in favour of a stronger private rented sector - http://www.smith-

   o Council of Mortgage Lenders: a treasure trove of mortgage information
     including on first-time buyers -

                                                                               CPF/18 May 2011


                   Conservative Policy Forum, 30 Millbank, London SW1P 4DP

                     What challenges do you think Britain will face in 2015?
                    Join the discussion at

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