The plight of the ‘new poor’

They are the “new poor” – the huge numbers of young people right across the nation, many of them earning well above the national average, who now have little or no hope of buying a home of their own. Ignoring their plight any longer will have huge consequences for us all.

Last week, I sent Yvette Cooper, the housing minister, a suggested 10-point programme of urgent, practical short-term measures to help. This, very briefly, is the full list:

• Speed up the sale of the thousands of acres of redundant government land
• Sell it off at below market value in areas of acute housing need in return for cheaper first-time buyer homes in perpetuity
• Identify small sites in every town and village for affordable homes
• Strengthen protection for core green-belt areas while releasing smaller fringe areas for residential development
• Fast-track planning priority for first-time buyer and affordable housing applications
• Implement a short-term planning amnesty for small-scale domestic planning applications to break the logjam in the system
• Prioritise first-time buyers over investment buyers
• Scrap stamp duty, for first timers only, since the current threshold has been savagely eroded by house price inflation.

Once these are in place and housing supply is increased – and not before – the next two measures kick in:

• Mortgage tax relief for first-time buyers
• The introduction of tax relief on the contributions parents make to the first homes of their offspring.

Many first-time buyers are dependent on significant financial support from their parents, who themselves often have worries about their own old age and pension provision. Such help should be applauded and encouraged with fiscal incentives because first timers are just as important to our economic wellbeing as, for example, investors in fledgling businesses, who receive tax relief under venture capital trusts.

We’ve been talking about resolving these problems for years. Aspiring first-time buyers are in a far worse situation than at any time in recent history. It’s now a major national problem with far reaching social, economic and political consequences – just imagine the impact of a resentful generation reaching retirement with no equity to boost their pensions. My proposals are meant to help speed up the debate on this issue but even if, as I hope, supply can be increased in the short term, first-time buyers are going to need a lot of help for some years to come if we are to address the affordability issues.

But housebuilders and government cannot resolve this on their own without the active co-operation of communities. We have a collective responsibility to provide the affordable housing our younger generation need. Now is the time for action.