UK Finance has unveiled its latest report, Homes We Need, outlining strategic recommendations to address the UK’s substantial housing shortfall, which currently stands at 4.3 million homes. The report emphasizes the critical role of the banking and finance sector in supporting the housing market through the provision of mortgages and financial services.
The report underscores the urgency for further housing market reforms to complement the government’s initiatives. Despite the government’s swift actions to promote housebuilding and prioritize affordable housing, UK Finance asserts that achieving the necessary progress requires robust collaboration between public and private sectors.
Key recommendations from the report include:
Streamlining the Planning System: UK Finance calls for a more straightforward, rule-based planning process. Shortening development timelines and ensuring consistency in planning decisions are essential for providing developers with the certainty needed to meet the government’s housing targets.
Enhancing Home Ownership: To support first-time buyers, the report suggests making the current temporary nil-rate bands on stamp duty permanent for properties up to £425,000. It also advocates for expanded access to shared ownership schemes and a review of post-global financial crisis prudential rules, which may have hindered mortgage accessibility.
Assisting Older Homeowners: The report proposes creating an independent advisory service for older homeowners and minimizing upfront costs for those downsizing. This includes potential stamp duty exemptions and ensuring that housing targets accommodate homes suitable for older individuals in desired locations.
Improving the Rental Market: Recommendations include annual reviews of the Local Housing Allowance to align with rental market conditions and establishing a government-backed registration system for rental property owners. This system would help identify and address non-compliant landlords and substandard properties. Additionally, tax incentives could encourage landlords to make environmentally friendly upgrades.
Charles Roe, Director of Mortgages at UK Finance, commented:
“Securing a safe, affordable home is a fundamental need, and we commend the government’s efforts to address the housing shortfall and facilitate homeownership. However, the scale of the challenge requires decisive action from both the public and private sectors across the UK housing market.
“Our report provides a range of recommendations designed to support and enhance the government’s plans. These include simplifying the planning process, addressing barriers for first-time buyers, meeting the needs of an ageing population, and improving standards in both the private and social rental sectors.”
