Outlook for UK housing and the implications for policy: Are we reaping what we have sown?
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 29 May 2009
Abstract
Purpose
The purpose of this paper is to present a brief analytical summary of the current downturn in the UK housing sector. It then aims to ask whether the severity of the slowdown and its eventual consequences have been exacerbated by key aspects of housing and welfare policy.
Design/methodology/approach
The paper examines: the promotion of property as an investment by successive UK governments since the Second World War; how the investment emphasis of policy enabled the promotion and growth of private rental partly funded through buy‐to‐let mortgages – a new financial product that allows individuals to take out a mortgage on a property for letting purposes; the expansion of cheap credit, due in part to the burgeoning securitised lending sector drawing heavily on housing equity (the decline of which is implicated in the current economic downturn); and reforms of the welfare system in the mid 1990s that have severely weakened the safety net for low‐income mortgage borrowers who are most vulnerable to market turbulence.
Findings
It was found that there are wider questions to be asked of the current downturn than how deep or how long the current recession will be. More important questions relate to the role that housing policy has played in exacerbating volatility and the future implications for modernizing housing policy.
Research limitations/implications
The paper identifies a number of key research questions that follow from the analysis regarding the winners and losers of homeownership and the concomitant implications for policy.
Originality/value
The paper identifies areas of government failure relevant to the current crisis and knowledge gaps that need to be addressed in order to develop a coherent evidence base on which to base future reform of housing policy. As such, the findings will be of interest to policy makers and housing researchers.
Keywords
Citation
Pryce, G. and Sprigings, N. (2009), "Outlook for UK housing and the implications for policy: Are we reaping what we have sown?", International Journal of Housing Markets and Analysis, Vol. 2 No. 2, pp. 145-166. https://doi.org/10.1108/17538270910963081
Publisher
:Emerald Group Publishing Limited
Copyright © 2009, Emerald Group Publishing Limited