Employers should help pay mortgage deposits rather than pensions, says report

16 Oct 17

Employers and the government should pay contributions to help employees save for a mortgage rather than pay pensions contributions, a report out today said.

A Localis report looking at the barriers to home ownership said that the private rental sector was stopping young people getting on the housing ladder.

“To prevent home ownership being a preserve of the old and wealthy, the auto-enrolment of employees aged 18-40 to pension schemes by employers should include an option to make contributions towards a Lifetime ISA,” the report A Policy Programme to Save the Home Owning Democracy said.

“Employees, employers and government would make contributions towards deposits (in place of, rather than on top of, pension contributions).”

The number of homes brought by people aged over 25 to 44 with a mortgage had dropped by more than 1.6 million in just over a decade, the reported stated.

“There is a clear connection between the hallmarks of the private rental sector and the ability of people to accrue enough capital to own their own home,” it said.

“Deep rooted and disruptive reform of the housing market is required.”

Other recommendations included a programme of new towns in the South East and ‘yellowfield registers’, which would allow the release of land for new homes in areas where green belt protection but might not be warranted. 

Housing minister Alok Sharma, who was at the launch of the report, admitted the number of new homes built under the Public Land for Housing Programme “has not been what one hoped or expected”. He said: “We need to be doing a lot more a lot faster”.

He said the government was considering denying New Homes Bonus cash to councils that failed to adequately plan for new housing.

Economist and Sunday Telegraph journalist Liam Halligan said the government should concentrate on the supply of housing and should not be “juicing up” the demand side through policies such as Help to Buy.  

“The housing market used to be a source of social mobility, ambition, aspiration and contentment but the housing market now is a source of social immobility, bitterness and increasingly rancor,” he said.

Did you enjoy this article?