Paragon calls for ‘root and branch’ housing review

Paragon wants the Chancellor to launch a root and branch review into UK housing in Wednesday’s Budget.

The lender raised concerns about limited housebuilding, reduced investment in social housing and the tax squeeze on buy-to-let landlords.

The UK population is forecasted to grow from 64.6 million in 2014 to 74.3 million in 2039 based on Office for National Statistics data.

Nigel Terrington, Paragon group chief executive, said: “The government needs to instigate a thorough review of UK housing need in the context of the expected population growth. The size of forecast population growth is the equivalent of nine cities the size of Birmingham.

“The private rented sector is an important provider of homes for people in the UK. For many years, successive governments have actively reduced the provision of social housing. This, together with other regulatory changes such as the Mortgage Market Review which has restricted mortgage credit to homebuyers, mean more people are turning to the PRS.

“There is real risk of lasting damage to the sector if the impact of the changes is not fully understood and particularly if the government continues to layer one measure upon another without a thorough and robust assessment of the progressive impact different measures will have.”

Paragon also told George Osborne not to make any further changes to landlord taxes.

Terrington added: “The PRS does not have a binary relationship with homeownership: holding back growth in the number of properties for rent will simply not increase home ownership and may increase costs and reduce amenity for tenants.

“In the context of forecast population growth, together with a current and projected housing shortage, the key requirement is for the government to create a stable policy framework that will encourage investment in the supply of good quality, affordable housing across all tenures, so that people can choose the best housing option to suit their lifestyle.”