Committee publication · Report · 9 June 2026 · HC 41
2nd Report – Affordability of Home Ownership
From: Housing, Communities and Local Government Committee
Inquiry: Affordability of Home Ownership
Government response deadline: 9 August 2026
Summary
This HCLG Committee report examines the affordability crisis in UK home ownership, finding that house prices have risen to 7.71 times median earnings (from 3.54 times in 1997) while home ownership rates have fallen from 71% in 2003 to 62.5% in 2021. The committee concludes that supply-side interventions (building homes) and demand-side interventions (helping buyers afford homes) must work together, but notes demand-side policies risk inflating prices further. It supports the government's 1.5 million homes target, reformed shared ownership, Lifetime ISA replacement, and mortgage finance easing, but criticises Stamp Duty Land Tax, slow progress on empty homes, and lack of support for SME-led affordable housing.
Key findings
- Home ownership has declined to 62.5% (2021 Census) from 71% in 2003; house prices now 7.71 times median workplace earnings, up from 3.54 times in 1997, with prices rising faster than wages for decades.
- Neither supply-side nor demand-side interventions work in isolation: building homes alone will not reduce prices sufficiently, and demand-side help (grants, mortgages) risks inflating prices by increasing purchasing power without addressing supply shortfall.
- Reliance on 'bank of mum and dad' (£9.6 billion gifted/loaned in 2024, 52% of first-time buyers) entrenches inequality; parental home ownership now predicts offspring ownership more than personal earnings.
- Private sector housebuilding (75% of completions) is constrained by build cost inflation (17% since 2022, £76,000 additional cost per home) and low viability across 48% of England; government must ramp up delivery from 208,600 homes (2024–25) to meet 1.5 million target by end of Parliament.
- Government interventions require cross-departmental coordination (MHCLG, Treasury, DWP, Defence, DBT); DWP spends £36 billion annually on housing support, creating interdependencies that current policymaking does not fully exploit.
Recommendations
- MHCLG should publish annual homebuilding targets for each remaining year of the Parliament (by summer recess) showing ramp-up trajectory and targets separately for affordable and social housing, to enable tracking against the 1.5 million goal.
- Government should empower councils to contribute more to homebuilding by providing greater clarity around discounted rates of borrowing for council homebuilding.
- Government should replace the Lifetime ISA with a new savings product focused solely on homebuying, without the punitive withdrawal charge of Lifetime ISAs or the static property price cap that limited its utility in high-cost regions.
- Government should ease restrictions on mortgage finance regulation while retaining oversight of the system, expanding access to mortgages for eligible buyers.
- Government should accelerate implementation of improvements to the shared ownership model and replacement of the leasehold system with commonhold.
- Government must reform Stamp Duty Land Tax to prevent it slowing the housing market and damaging the economy.
- Government should make it easier to bring empty and under-occupied homes back into residential use.
- Government should provide greater support to SMEs to access available finance to deliver affordable housing.
Tone
CriticalTopics
Key actors
Florence Eshalomi, Matthew Pennycook MP, Lucy Rigby KC MP, David O'Leary, Sophie Hale, Dr Peter Levell, Housing, Communities and Local Government Committee, Ministry of Housing, Communities and Local Government
Notable line
“Today your chance of homeownership has more to do with whether or not your parents own their home than what you do or how much you earn.”
Key Quotes
“As a country we have failed, pretty miserably, to build enough homes of all tenures to meet housing demand.”
“Two things can be true at the same time: there is strong evidence to attest to the fact that building homes of any tenure, including for private market sale, makes other housing more affordable in the short term and in a localised sense.”
“Even if you build loads of houses, they are still going to be very expensive. That is not saying that building houses does not help. It is saying that the problem is really big.”
“This intergenerational wealth transfer has, in my view, divorced house prices from underlying wages. Increasingly if you don't have bank of mum and dad, you won't be able to get on the housing ladder.”
“"constrained by affordability and viability. [ … ] If the economics of building the homes does not stack up …”
“According to the English Housing Survey, 40% of last year's first-time buyers used inheritance or money gifted from family towards a deposit for a house.”
“Affordability is a multilayered and complex challenge, shaped by house price inflation, constrained wage growth, limited access to mortgage finance and systemic inefficiencies across the home-buying and selling process.”
“It would take maybe 10 years of building at that much higher level before you would see a real material impact on affordability.”
Source · parliament.uk record ↗