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Radical change is needed in the UK housing market to ensure young people can afford to buy a home, according to a think-tank. The Housing and Finance Institute (HFI) says government loans should be offered for those struggling to find a deposit.

Help to Buy currently offers interest-free loans for five years to first-time buyers. But the HFI suggestion would mean that these new loans would be repaid as a proportion of salary once the homeowner is earning a certain amount, operating in a similar way to student loans.

And, as with student loans, the home loans would be written off after 40 years or by state retirement age.

4 pillars for good homes

The HFI report, A Time for Good Homes, has been prepared along with housing association Radian, and it sets out its four pillars for good homes in the UK. They are:

  • Stability
  • Flexibility
  • Affordability
  • Opportunity

The report offers a 10-point plan to create more social rental and increase home ownership, calling for the £44 billion housing budget to move its priorities away from the private rented sector to providing a bigger, more flexible social rented sector alongside an expanding home ownership.

Among its suggestions are the establishment of an independent national housing delivery commission to produce a 10-year housing plan that includes a target that 90 percent of homes have a stable tenure by 2035.

And it asks that the Government significantly extend home ownership schemes beyond the expected end of the Help to Buy in 2021. These could include providing direct deposits, tax breaks and mortgage finance guarantees.

Fresh perspective needed

Natalie Elphicke, chief executive of the HFI, said: “It is high time we introduced a strategy that incorporated both social housing and home ownership as priorities, instead of peddling the usual narrative that one is good and the other bad.

“We need a fresh perspective to ensure we don’t just provide more and more homes, but that we provide good homes for all generations. We need to move away from the current emphasis on the private-rented sector.”

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