A report examined the housing market in England. It said that the average first-time buyer now had an average income of £36,500, and required a £30,000 deposit. This was said to amount to almost ten times the deposit required in the early 1980s, when the average salary for first-time buyers was £20,000. It said that two thirds of first-time buyers received financial help from parents, and it discussed the regional variations in property wealth and housing market conditions. It called on the next United Kingdom government to stop short-term housing initiatives and to produce, within the first year of office, a long-term plan to deliver more, sustainable, and high quality new homes, in the right areas, as well as additional rental opportunities.
Source: Broken Market Broken Dreams: Let's end the housing crisis within a generation, National Housing Federation
Links: Report | Summary | NHF press release | Guardian report | Inside Housing report
Date: 2014-Sep
A paper examined the impact of different types of supply constraints on house prices in England, drawing on a panel dataset of 353 local planning authorities from 1974 to 2008.
Source: Christian Hilber and Wouter Vermeulen, The Impact of Supply Constraints on House Prices in England, CPB Netherlands Bureau for Economic Policy Analysis
Links: Paper
Date: 2014-Sep
An article examined the relationship between news media coverage and house prices in the United Kingdom between 1993 and 2008.
Source: Clive Walker, 'Housing booms and media coverage', Applied Economics, Volume 46 Issue 32
Links: Abstract
Date: 2014-Sep
An article examined the relationship between house prices and consumption, exploring conflicting results from the United Kingdom.
Source: Annalisa Cristini and Almudena Sevilla, 'Do house prices affect consumption? A re-assessment of the wealth hypothesis', Economica, Volume 81 Issue 324
Links: Abstract
Date: 2014-Sep
An article examined the effects of marital separation on home ownership in Britain and Germany. It said that separation was negatively associated with ownership, partly explained by lower prior investments in ownership by those who separated, but partly a direct consequence of separation. The article said that differences between the housing markets allowed ex-partners in Britain to maintain relatively high levels of ownership after a separation, while ownership rates fell dramatically in Germany.
Source: Philipp Lersch and Sergi Vidal, 'Falling out of love and down the housing ladder: a longitudinal analysis of marital separation and home ownership', European Sociological Review, Volume 30 Number 4
Links: Abstract
Date: 2014-Aug
The government began consultation on proposals for two new compensation policies for owner-occupiers of properties close to the HS2 rail route from London to the West Midlands. The 'alternative cash offer' would give owner-occupiers within the Rural Support Zone (the zone within which the voluntary purchase scheme would apply) a payment of 10 per cent of what would have been the un-blighted open market value of their property, capped at between £30,000 and £100,000. The 'home-owner payment' scheme would share the benefits of the railway with rural owner-occupiers outside the Rural Support Zone but within 300m of the line, by means of a cash payment. The consultation would close on 30 September 2014.
Source: Property Consultation 2014: For the London-West Midlands HS2 route, Cm 8894, Department for Transport/High Speed Two (HS2) Limited
Links: Consultation document | Associated documents | DT press release
Date: 2014-Jul
A report provided findings from the first phase of work of a taskforce that was established to investigate the impact of negative equity, repayment arrears, and possessions in Northern Ireland. It said that Northern Ireland's landscape continued to be shaped by the legacy of the rise and subsequent fall in house prices prior to, and then after, the economic crisis. The report said that many of those adversely affected had previously became over-indebted, and had been unable to withstand income-shocks or life-changing events. The work was ongoing and the next phase sought responses to an online survey, and would consider and develop potential mitigating actions.
Source: Taskforce Initial Evidence Paper: Negative equity, arrears and possessions in Northern Ireland, Repossessions Taskforce
Links: Report | Department for Social Development press release
Date: 2014-Jul
A think-tank paper examined whether and how income and wealth polarization was an explanatory factor in understanding why the housing market did not provide affordable housing for all in the United Kingdom. It said that there was a strong and consistent correlation between income inequality and house prices, with inequality both increasing prices and restricting supply through affecting consumption, influencing attitudes to new development, reducing the numbers of moves within the market, and sorting the market by creating uplift in prices in higher value areas that were not offset by reductions elsewhere. It discussed the implications for housing policy, including Help to Buy.
Source: Brian Green and Faiza Shaheen, Economic Inequality and House Prices in the UK, New Economics Foundation
Links: Paper
Date: 2014-Jun
A report by a committee of MPs said that although the Department for Communities and Local Government introduced the Help to Buy Scheme in an efficient and timely manner, the department did not assess whether there were alternative, more effective options that would have delivered the scheme's policy objectives (increasing demand for new homes, making mortgage finance more accessible and affordable, and encouraging developers to build more new homes). The report noted the lack of comprehensive evaluation and said that, since the scheme was one of a number of government interventions addressing wider housing market failures, the department needed to develop a way to assess the combined effectiveness of its schemes. The report discussed the medium- and long-term risk to the department of building a £10 billion portfolio of equity loans that would require ongoing management, creating a heavy, and potentially long-term administrative burden. It said that the department had not ruled out the possibility of selling the Help to Buy portfolio in the future.
Source: Help to Buy Equity Loans, Second Report (Session 2014–15), HC 281, House of Commons Public Accounts Select Committee, TSO
Links: Report | DCLG response | Guardian report
Date: 2014-Jun
An article examined the housing and mortgage markets in the United Kingdom and the Netherlands, and the governments' responses following the global financial crisis of 2008. It said that the two countries enacted similar short-term stimulus measures for the housing market, and had adopted stricter long-term regulations, thereby replacing the earlier assumption of rational consumer behaviour with principles of behavioural economics. The article noted that the institutional frameworks within each system would condition the effects of such measures, such that outcomes in the two countries would differ, but said that tighter regulation of mortgage markets was expected to reduce demand for owner-occupied housing.
Source: Kathleen Scanlon and Marja Elsinga, 'Policy changes affecting housing and mortgage markets: how governments in the UK and the Netherlands responded to the GFC', Journal of Housing and the Built Environment, Volume 29 Number 2
Links: Abstract
Date: 2014-Jun
A report examined the affordability of owner occupied housing in England, drawing on an analysis of properties for sale that were advertised on an online property site on one day in April 2014. It said that affordability problems were found across the country, with less than 10 per cent of available properties being affordable to a working couple with children on average wages in more than half (59 per cent) of local authority areas, and 14 local authority areas where there were no such affordable properties. The report also said that, in four fifths (85 per cent) of local authority areas, fewer than one in ten available properties were affordable to a single person on average wages, with 13 local authority areas having no such affordable properties. London and the south east were shown to be particularly affected.
Source: Tristan Carlyon, How Much of the Housing Market Is Affordable? Analysis of homes for sale, Shelter
Links: Report | Shelter press release | Guardian report
Date: 2014-Jun
A report provided findings from the Scottish Government's consultation on the Home Report, an information pack required to be provided to home buyers. It said that, overall, the majority supported the Home Report, but some issues were raised about the perceived lack of transparency and conflict of interest in reports that were commissioned through selling agents. A majority thought that the information provided was appropriate and useful, and did not think that the upfront costs deterred the marketing of properties. Most respondents did not support the establishment of a national register of Home Reports.
Source: Lucy Robertson and Louise Blair, Consultation on the Home Report Analysis of Responses, Scottish Government
Date: 2014-May
A special issue of a journal examined the experiences of, approaches to, and explanations for the interactions between developing financial and economic crises and national housing markets in European countries.
Source: Journal of Housing and the Built Environment, Volume 29 Number 2
Links: Table of contents
Notes: Articles included:
Mark Stephens and Christine Whitehead, 'Rental housing policy in England: post crisis adjustment or long term trend?'
Kathleen Scanlon and Marja Elsinga, 'Policy changes affecting housing and mortgage markets: how governments in the UK and the Netherlands responded to the GFC'
Michelle Norris and Dermot Coates, 'How housing killed the Celtic tiger: anatomy and consequences of Ireland's housing boom and bust'
Date: 2014-May
A think-tank report examined the debt exposure of households with mortgages in the United Kingdom, drawing on data from the Family Resources Survey. It said that around 2.3 million households might face affordability problems, and around 770,000 households were both at risk of being 'mortgage prisoners' due to a limited ability to switch to better mortgage deals (owing to low equity levels, being self-employed, or having interest-only mortgages), and at risk of becoming 'highly geared' (with monthly mortgage repayments of at least one third of their disposable income) by 2018. The report noted the geographical variations in affordability. The think-tank would publish a further report, later in 2014, regarding potential policy responses.
Source: Matthew Whittaker, Mortgaged Future: Modelling household debt affordability and access to refinancing as interest rates rise, Resolution Foundation
Links: Report | Resolution press release | Inside Housing report
Date: 2014-May
An article examined the link between job satisfaction and home-ownership. It was found that the transition to ownership reduced job satisfaction within a year following the purchase. The reduction was sharper when the purchase was financed through a mortgage. The initial reduction was more than doubled within 3 years after the transition. Home-ownership might be a constraint for the career prospects of employees, since it reduced mobility and forced them to become more dependent on the local labour market conditions.
Source: Semih Tumen and Tugba Zeydanli, 'Home ownership and job satisfaction', Social Indicators Research, Volume 117 Number 1
Links: Abstract
See also: Semih Tumen and Tugba Zeydanli, Home Ownership and Job Satisfaction, Working Paper 13/22, Central Bank of the Republic of Turkey
Date: 2014-Apr
An article examined residential moves by people age over 50 in European countries. Four types of moves were observed: renting to owning, owning to renting, and, for home-owners, trading up or trading down. In the younger group (aged 50-64), trading up and purchase decisions prevailed; in the older group (65+), trading down and selling were more common. Overall, moves were rare, particularly in countries characterized by high transaction costs. Most moves were driven by changes in household composition (divorce, widowhood, 'nest-leaving' by children). But economic factors played a role: low-income households who were house-rich and cash-poor were more likely to sell their home late in life.
Source: Viola Angelini, Agar Brugiavini, and Guglielmo Weber, 'The dynamics of homeownership among the 50+ in Europe', Journal of Population Economics, Volume 27 Number 3
Links: Abstract
Date: 2014-Apr
An article examined the causal linkage between housing assets and small business investment and the economy. It discussed the reductions in both small business investment and mortgage lending to business owners since 2008.
Source: Darja Reuschke and Duncan Maclennan, 'Housing assets and small business investment: exploring links for theory and policy', Regional Studies, Volume 48 Number 4
Links: Abstract
Date: 2014-Apr
A think-tank report examined the impact of overseas investment on the residential housing sector in the United Kingdom, and considered whether additional measures were needed both to stabilize house prices in London and to tackle demand as well as supply. It recommended that non-residents and short-term visa holders should be prevented from investing in residential property unless their investment would increase the housing stock.
Source: David Green and Daniel Bentley, Finding Shelter: Overseas investment in the UK housing market, Civitas
Links: Report | Civitas press release
Date: 2014-Feb
