Think tank urges government to help first-time buyers

Government and employers should contribute to house deposit-saving schemes to help young people get on the property ladder, a think tank has urged.

The call is one of a number of measures contained in the interim findings of a new report, Disrupting the Housing Market, which will be published by Localis next month.

In the report, the think tank calls for auto-enrolment pension schemes to be extended to give employers the option of contributing to a Lifetime ISA in order to help people save for a deposit.

The report states employers should be expected to make contributions equal to 3% of the employee’s salary and the government should also continue to match 25% of employee contributions.

According to YouGov polling carried out for the forthcoming report, 58% of people who do not already own their home are saving nothing at all each month for a deposit to buy somewhere in the future.

‘Whether out of choice, or simply because they do not have enough money at the end of each month to do so, a majority of people are not building any financial capacity with which to get a mortgage and purchase a home in the future,’ said senior researcher, Jack Airey.

‘This crisis of saving transcends people of all tenures, ages, regions and socio-economic classes yet these consequences are underappreciated, least of all by non-homeowners themselves.  Under this auto-enrolment scheme, rather than relying on the “Bank of Mum and Dad”, employers and government would help young people onto the housing ladder.’

The interim findings also call for a new approach to green belt land, which will allow local authorities to release land for new homes in areas where green belt protection is unwarranted.

According to the report, the current green belt policy is ‘blunt’ and ‘ineffective’ and gives greater priority to ‘golf courses and horse fields’ than new homes.

It will state local authorities should be compelled to prepare, maintain and publish registers of land that is designated green belt, but ‘demonstrably’ should not be.

If a council can demonstrate that such land does not serve these purposes, then it should be included on a ‘yellowfield register’ and no longer be designated as green belt.

The report will also recommend giving greater legal protections to private rented tenants by allowing them to choose their initial tenancy length at six-month intervals, up with 36 months.

The chief executive of Localis, Liam Booth-Smith, said: ‘The available evidence overwhelmingly points to the vast majority of people still wanting to own a home. It is an important life ambition, one that recent generations have enjoyed and future generations should too.

‘The housing market is everyone’s problem – those who already own their home are dependent on someone else buying it. If the first rung of the housing ladder is lifted too high, there will be fewer and fewer buyers to sell to in the future,’ he added.

‘A Burkean intergenerational contract needs to be restored between those who wish to own their home, those that already do; and those that want to leave for retirement.’