Housing shortage costs consumers £4bn a year
The research, which is part of the CBI’s manifesto, also outlines business vision for a better Britain and the measures needed to help unleash the potential in the private-sector to drive economic growth, keep the UK on the centre stage of global affairs, and ensure growth can benefit everyone.
Among other measures the CBI is calling for is a roadmap for increasing capital spending – once the deficit is eliminated – as a percentage of UK GDP in the next parliament and beyond, an independent body to determine the UK’s infrastructure needs and also to create a gold-standard vocational A Level system.
Katja Hall, CBI deputy director-general, said: “With conference season around the corner, we need all political parties to put forward election pledges which tackle the UK’s challenges head-on so that we deliver prosperity for everyone not just from next May, but for a generation. Addressing the chronic housing shortage should be near the top of every party’s to-do list.
“A perfect storm is brewing in the housing market. With demographic changes and demand currently dramatically outstripping supply, now is the time for action.
“Political parties of all colours have made the right noises on the need for more homes, but without serious action the ambition to own a home will become more and more out of reach to ordinary people.
“Our research shows the national housing shortage is taking a £4bn slice out of consumers’ pockets.
“We need a stronger response from politicians who must be ready to take bold decisions from building on low quality green belt land to overhauling Stamp Duty.”
To satisfy current levels of demand, 240,000 new homes need to be built a year. However, over 200,000 homes have been delivered in only four out of the last fourteen years, whilst in 2010, fewer houses were built than in any year since the Second World War.
This gap in demand is pushing up prices, with, on average, a 56% increase in house prices nationally since 2004, and a 90% increase in London.
With housing affordability a major political, social and economic issue, the CBI is urging all political parties to commit to increasing supply.
Among the measures it’s calling for are the development of ten new towns and garden cities by 2025, doubling the number of new homes currently built, to 240,000 a year and reforming Stamp Duty to end its distortive impact on the housing market.
Hall added: “Our manifesto sets out how all political parties can give ambitious British firms the best chance to invest, invent, export and expand because business underpins our future economic success.
“That means tackling the UK’s creaking infrastructure so we need an independent body that can set out a clear vision for major national projects.
“In some vital areas we are stuck behind our international competitors with little prospect of overtaking without some hard choices being made.
“We must look at how to attract more investment and enhancing the research and development tax credit could be a catalyst for greater innovation and world-leading research.
“Progress has been made on putting women on an equal footing to men in work, but if we want to make the most of all in our society, we need more women given the opportunity to get to the top and narrow the gender pay gap.”