That’s according to UK Finance, the body representing members of the banking and finance industry.
It said the scale of the challenge requires strong action from the public and private sectors.
UK Finance released a new report, Homes We Need, which assesses the current state of our housing market and recommends actions to be taken to address the UK’s 4.3 million housing shortfall.
The report said: “The UK housing market is grappling with a shortage of affordable, secure and suitable homes for people at different life stages.
“We believe that well-considered policies, backed by evidence whilst acting on lessons learned from the past, could address the challenges the housing sector faces.”
Suggested changes
Despite the new Government acting quickly to encourage more housebuilding, UK Finance has called for additional measures, including the temporary nil-rate band for first-time buyers on stamp duty up to £425,000 to be made permanent. The current temporary increase in threshold is set to reduce to £300,000 from 31 March 2025.
The banking association also suggested a review into whether prudential rules introduced after the global financial crisis have made getting a mortgage too tough.
And it wants it to be made easier for older homeowners to downsize with help from an independent advice service for last-time buyers, alongside a possible stamp duty exemption and more homes built that are suitable for older buyers.
In the rental market, UK Finance called for a review of the Local Housing Allowance so it keeps pace with rents, as well as a Government-sponsored registration system for landlords and tax incentives to encourage them to make green upgrades to their properties.
Charles Roe, director of mortgages at UK Finance, said: “Everyone needs a safe, secure and affordable home, so we welcome the Government moving quickly to reduce the UK’s housing shortfall and get more people onto the housing ladder.
“However, the size of the challenge means we need strong action, from both the public and private sectors, right across the UK’s housing market.
“Our new report sets out a range of recommendations to complement the Government’s plans.”
A Ministry of Housing, Communities and Local Government spokesperson added: “We are facing the most acute housing crisis in living memory, and in a matter of months, this Government has already taken action by announcing the most ambitious overhaul to the planning system yet.
“We will go further by introducing a Planning and Infrastructure Bill to accelerate delivery and ensure we get Britain building again. And we will continue to work in partnership with councils to deliver 1.5 million homes.”
Charlotte Harrison, CEO of Home Financing at Skipton Building Society, said: “The scale of the housing affordability challenge is so great that no one person or organisation can lead that charge; we therefore stand with UK Finance in their recommendations to the Government today. We believe that the current temporary nil-rate band for first-time buyers should be made permanent, as this will help increase access for many when it comes to getting onto the property ladder.
“We also actively encourage the Government to include building homes suitable for older buyers – in places they want to live – within their housing targets, and encourage the Government to consider stamp duty exemptions for older downsizers too. This will help to free up housing stock and improve flow across the entire market, helping first-time buyers in turn.”
