Source · Select Committees · Housing, Communities and Local Government Committee
2nd Report – Affordability of Home Ownership
Housing, Communities and Local Government Committee
HC 41
Published 9 June 2026
Recommendations
6
To demonstrate its progress to improving the affordability of home ownership, MHCLG should, before the...
Recommendation
To demonstrate its progress to improving the affordability of home ownership, MHCLG should, before the start of the summer parliamentary recess publish annual homebuilding targets for each remaining year of the Parliament. These should show how government expects homebuilding to …
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Ministry of Housing, Communities and Local Government
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10
The government must provide local authorities with the necessary clarity for future borrowing by extending...
Recommendation
The government must provide local authorities with the necessary clarity for future borrowing by extending the Housing Revenue Account rate of borrowing from the Public Works Loan Board at least two years into the future on a rolling basis. (Recommendation, …
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Ministry of Housing, Communities and Local Government
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18
The government should clearly and officially define affordable housing in a way that can be...
Recommendation
The government should clearly and officially define affordable housing in a way that can be used for all relevant purposes, not just as part of the planning system. The definition should refer to local average income levels instead of just …
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Ministry of Housing, Communities and Local Government
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32
MHCLG and HM Treasury must begin the process of reforming Stamp Duty Land Tax to...
Recommendation
MHCLG and HM Treasury must begin the process of reforming Stamp Duty Land Tax to improve affordability. Before the end of the calendar year, the government should launch a consultation into potential alternatives to the current tax, which should consider …
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Ministry of Housing, Communities and Local Government
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Conclusions (28)
1
Conclusion
The price of homes in England has risen faster than wages and inflation, and the average home now costs more than seven times the average income; in the 1990s, the average home cost less than four times the average income. Over the long term, the ratio between wages and house …
2
Conclusion
The affordability of home ownership is a complicated and multivariant problem, with no easy or straightforward solutions. Demand-side solutions cannot work in isolation (as they often counterproductively increase house prices as a secondary effect), but supply-side solutions also are not sufficient (homebuilding cannot happen at the necessary speed to have …
3
Conclusion
Many government departments have roles to play in tackling housing affordability in this country. We support the cooperation we have seen to date between the Ministry for Housing, Communities and Local Government (MHCLG) and HM Treasury, including in response to this inquiry, but tackling home affordability in the long-term requires …
4
Conclusion
Support from family, often called the bank of mum and dad, is a major part of the current housing market for first-time buyers. This entrenches inequality in the sector, with home ownership resembling an inherited characteristic: a young person’s chance of homeownership depends more 53 on parental home ownership than …
5
Conclusion
We support the government’s aims to improve rates of homebuilding to address historical under-supply of homes and address the chronic unaffordability of home ownership, but we remain concerned that at current rates the government will not hit its target of 1.5 million new homes by the end of the Parliament. …
7
Conclusion
Most homebuilding is currently done by private sector builders, primarily the larger organisations. Homebuilders have been criticised for not building homes at the socially optimal rate, which they have said is because of high costs (some caused by government policies) and a weak market for new-build properties, and ultimately underpinned …
8
Conclusion
MHCLG must write to us before the summer parliamentary recess, and then six-monthly thereafter, setting out what actions it has taken to increase homebuilding rates by private developers, its progress so far, and the levels of cooperation it has received from the housebuilding industry. (Recommendation, Paragraph 52)
9
Conclusion
At their peak, local authorities contributed over 40 times as many home completions per year as they do now, but the homebuilding landscape has fundamentally changed since then and we consider those former levels of local government homebuilding will be practically impossible to return to. We support MHCLG’s stated goal …
11
Conclusion
Government bodies and developers will not be able to maximise the increase to the supply of homes through homebuilding unless they also consider the types, tenures, prices and sizes of homes being delivered. While it is true that many areas of the country do not have enough of any type …
12
Conclusion
While it is right for planning decisions to be driven primarily by local authorities through the production of local plans, MHCLG still has an important role in ensuring that new homes being built are sufficiently varied by type, tenure, size and price, in line with the government’s national aims and …
13
Conclusion
MHCLG’s new and upcoming guidance on local plan-making is welcome, but in addition to guidance for how local plans should be prepared it should provide guidance for what local plans should include, which local authorities can then interpret for their local areas. (Recommendation, Paragraph 68) 55
14
Conclusion
MHCLG should initiate a review into different mixes of home around the country, including by tenure, type and price, to assess what impact different mixes have on local absorption rates. This review should consider developments for sale since the start of this Parliament and be updated as new developments are …
15
Conclusion
There are at least hundreds of thousands of residential properties that are currently empty, many of which have been empty for many months or years. While the number of empty homes is much smaller than the total number of new homes that the government intends to build, bringing them back …
16
Conclusion
Government must make it easier for councils to take control of empty properties in their local authorities. This should include clarifying councils’ existing powers, such as Empty Dwelling Management Orders and Compulsory Purchase Orders; making the existing powers less risky by amending the conditions that must apply for councils to …
17
Conclusion
There are mixed views about what makes housing affordable, and no statutory definition of affordable housing. The main official definition, in the National Planning Policy Framework, is not reflective of the housing needs in the country. While we support the recent separate identification of Social Rent as its own category …
19
Conclusion
Shared ownership is a useful tool for getting people into home ownership, but it is not a long-term affordable option for many of the buyers to whom it is marketed. We welcome the government’s announcement of improvements to the shared ownership model, but it must not be the primary form …
20
Conclusion
The government is right to prioritise social rent as the main form of truly affordable housing, but this should not lead to it entirely neglecting intermediate housing such as Rent to Buy and Discount Market Sales, which are intended to benefit those who do not need social rent homes but …
21
Conclusion
We echo concerns voiced by the Committee of Public Accounts that an unacceptable number of homes constructed through Section 106 agreements remain unsold to registered providers of social housing, and welcome the fact that MHCLG is developing a policy package to identify and address the underlying issues. (Conclusion, Paragraph 94)
22
Conclusion
Before the summer parliamentary recess, MHCLG must update us on its progress in developing and implementing its new policy package to address issues in the Section 106 market. (Recommendation, Paragraph 95) Mortgage finance and other lending
23
Conclusion
Mortgages are a vital part of the housing market in this country, and as such a necessary component of improving access to home ownership to first-time buyers. The increased availability of high-Loan to Value mortgages can make it possible for people to purchase homes at higher values, but it is …
24
Conclusion
Government must work with mortgage providers and regulators to ensure that renters cannot be denied a mortgage on the grounds of affordability despite evidence of consistent payment of rent at higher monthly values than they would be paying in mortgage repayments. (Recommendation, Paragraph 103) 57
25
Conclusion
The Mortgage Guarantee Scheme, made permanent by the current government, is having a negligible effect on the availability of high- Loan to Value (LTV) mortgages in the current market and on the affordability of home ownership. It may have a benefit in the event of an economic downturn, which could …
26
Conclusion
HM Treasury must monitor, and annually publish, the costs of maintenance of the Mortgage Guarantee Scheme, as well as the impact that it is having on mortgage rates, to ensure that it remains value for money. These could be included in the official statistics of the scheme, or published separately. …
27
Conclusion
We support the efforts of the government and regulators to ease prudential and financial regulations, encourage growth and support first-time buyers, as long as adequate care is taken when doing so. In particular, limiting mortgages to 4.5 times a borrower’s income locks too many people out of owning their own …
28
Conclusion
The Lifetime ISA has helped many first-time buyers to own a home, but aspects of its design have limited its effectiveness in tackling housing affordability. These aspects include the Lifetime ISA’s nature as a hybrid product supporting both homebuying and retirement savings, its punitive withdrawal charge, and a property price …
29
Conclusion
The announced replacement product for the Lifetime ISA must focus specifically on supporting home ownership, should not risk people losing their initial investments in the event of changing situations, and should not have a price cap that prevents its use in parts of the country. (Recommendation, Paragraph 125)
30
Conclusion
The Help to Buy programme helped many people into home ownership, and encouraged housebuilding, but contributed to higher home prices and therefore exacerbated the housing affordability crisis overall. While some form of demand-side incentive may be necessary, it would not be appropriate to recreate Help to Buy as it was …
31
Conclusion
Stamp Duty Land Tax is a transaction tax that puts barriers in front of people seeking to buy a new home. Despite a discount for first-time buyers, Stamp Duty Land Tax reduces the affordability of home ownership, slows the property market, and ultimately damages the economy. While it is a …