Housing to be biggest inequality driver, warns Legal & General
Published by Brian Church for 24dash.com in Housing
Legal & General has warned that "soon an Englishman’s home will only be his castle if first owned by his parents" and said housing will be the biggest single cause of inequality.
The insurance giant issued the warning on the day it officially released its 'Let’s House Britain’ report at a seminar of housing experts. The report outlines key issues around housing and calls for consensus on how to tackle the supply side problem of how to build more homes in the UK.
"Home ownership is in decline in the UK because of rapid house price inflation and a massive reduction in housebuilding. Since the mid 1990s house prices have doubled in real terms, but the UK is only building 125,000 houses a year, compared to 400,000 per annum after the war," L&G said. "Baby boomers who bought houses in the 60s, 70s and 80s have lived for free, with capital appreciation far outstripping the cost of their mortgage. Their children will not be as fortunate. In fact, without parental support, the vast majority will never be able to buy their own homes."
As one of the largest UK property investors, L&G said it wants to "work with the government, local authorities, housebuilders, social housing providers, charities and other specialist organisations to create more housing stock in the UK, overcoming issues around access to land, planning and affordability in all forms of tenure".
L&G announced that it is currently involved in a pipeline of over 25,000 new homes across a range of tenures, as well as more than 17,000 student accommodation beds. L&G is one of six UK insurers that has committed to investing £25 billion in the UK by 2018. Looking to cater for all types of home ownership, it is also exploring other new initiatives such as building modern retirement villages, institutional-grade large-scale homes for rent and equity release models.
In March this year L&G secured a portfolio of over 4,000 housing units, let to Places for People Homes on a new 50-year lease, for £252 million, enabling the association to build 7,000 new housing units over the next seven years. On the lending side, it also agreed a £102m, 15-year debt facility to the Hyde Group, and a £40m, 25-year loan Thames Valley Housing Association, which will be used to support ongoing development.