Flagship government schemes to help more people get on the UK housing ladder have little impact on improving social mobility as better-off buyers are most likely to benefit from the support.

A new report published by the Social Mobility Commission today (Monday 3 July) into the impact of low-cost home ownership schemes found that those benefitting from schemes – such as Help to Buy – earn more than one and a half times the national working age median income.

Around 3 in 5 first-time buyers said that they would have bought anyway and that the scheme merely enabled them to buy a better property, or one in a better area, than they were originally looking for.

In the UK, promoting ownership for first-time buyers is a current government priority. Since the 1990s, around 1.8 million properties have moved into ownership through Right to Buy. 200,000 were provided through the affordable homes ownership route, and 300,000 households were assisted through reduced costs of attaining ownership.

The report which was carried out by researchers from the London School of Economics (LSE) builds on previous government commissioned research which found that Help to Buy Equity Loans had generated 43% additional new homes over and above what would have been built in the absence of the policy – contributing 14% to new build output.

However that research found that the average income for these Help to Buy buyers was £41,323 – similar to other first-time buyers who had average incomes of £47,528. Fewer than half of all working age households have incomes over £30,000, meaning that this scheme is unlikely to be able to help those households without more specific targeting.

The research points out that the high cost of housing means many low cost home ownership scheme are beyond the reach of almost all families on average earnings. Only 19% of Help to Buy Equity Loan completions to date were for homes worth less than £150,000. If households put down a 5% deposit, the researchers found that this exceeded the 40% limit of affordability for a median income working age household.

It recommends new action to help more low income buyers including targeting financial subsidies on households with incomes up to one-and-a-half times median income and setting different levels for different regions.

It calls on the government to provide more advice and guidance to households without a history of ownership to help them into ownership by managing risks and expectations. It also calls for restricting access to subsidies where a first-time buyer has unfettered access to alternative sources of financial and other support to become an owner, such as capital from parents or other relatives.

Earlier this year, the Social Mobility Commission published research which found that the proportion of first-time buyers relying on inherited wealth or loans from the bank of ‘mum and dad’ had reached a historic high and the trend looked set to continue. Increasingly, young people are relying on their parents to help them get a foot on the housing ladder. Over a third of first-time buyers in England (34%) now turn to family for a financial gift or loan to help them buy their home compared to 1 in 5 (20%) 7 years ago. A further 1 in 10 rely on inherited wealth.

For 25- to 29-year-olds, home ownership has fallen by more than half in the last 25 years from 63% in 1990 to 31% most recently. Many of those who do manage to buy eventually can only do so at an older age.

The Rt Hon Alan Milburn, chair of the Social Mobility Commission, said:

This research provides new evidence that the UK housing market is exacerbating inequality and impeding social mobility.

While it is welcome that the government is acting to help young people get on the housing ladder, current schemes are doing far too little to help those on low incomes to become home owners.

The intent is good but the execution is poor. Changes to the existing schemes are needed if they are to do more to help more lower income young people and families become owner-occupiers. Without radical action, particularly on housing supply, the aspiration that millions of ordinary people have to own their own home will be thwarted.

In its State of the Nation 2016 report, the commission recommended that the government should:

• commit to a target of 3 million homes being built over the next decade with one-third – or a million homes – being commissioned by the public sector.
• expand the sale of public sector land for new homes and allow targeted house building on green belt land.
• modify the Starter Home Initiative to focus on households with average incomes and ensure these homes when sold are available at the same discount to other low-income households.
• introduce tax incentives to encourage longer private sector tenancies.
• complement the Heseltine Panel’s plans to redevelop the worst estates with a matching £140 million fund to improve the opportunities social tenants have to get work.

The report’s lead author Dr Bert Provan, from the LSE, said:

Most research on low cost home ownership schemes has focused on the age profile of first-time buyers and impact on supply. This research looks at whether they open up home ownership to different and more diverse groups of low income households in the UK. It finds that while there are some positive effects of such schemes – such as increasing supply – the impact on improving social mobility is small.

1. The Social Mobility Commission is an advisory, non-departmental public body established under the Life Chances Act 2010 as modified by the Welfare Reform and Work Act 2016. It has a duty to assess progress in improving social mobility in the United Kingdom and to promote social mobility in England. It currently consists of 4 commissioners and is supported by a small secretariat.
2. The commission board currently comprises:
   • Alan Milburn (chair)
   • Baroness Gillian Shephard (deputy chair)
   • Paul Gregg, Professor of Economic and Social Policy, University of Bath
   • David Johnston, Chief Executive of the Social Mobility Foundation
3. The functions of the commission include:
   • monitoring progress on improving social mobility
   • providing published advice to ministers on matters relating to social mobility
   • undertaking social mobility advocacy

Brits will soon see the back of internet buffering and painfully slow download times, following the launch of a new fund today, which will support the rollout of cutting-edge connections across the country.

The government’s £400 million Digital Infrastructure Investment Fund (DIIF) will unlock over £1 billion for full fibre broadband, and kick-start better broadband connections across the country.

Ministers seek to revolutionise Britain’s digital infrastructure, making internet access more reliable for homes and businesses, and enabling more people to work remotely without disruption. The flexibility to work remotely is pivotal for driving our economy forward; reducing overheads and helping businesses to start and grow.

The government has already invested £1.7 billion to spur industry to rollout superfast broadband across the UK. This new fund will take that to the next level.

Launching the fund during a visit to Peterborough today, the Exchequer Secretary to the Treasury Andrew Jones MP will say:

We are investing £400 million to make sure the UK’s digital infrastructure is match-fit for the future. As technologies change and people’s habits move with them, it is crucial we play our part to ensure Britain stays at the front of the pack.

Gone will be the days where parents working from home see their emails grind to a halt while a family member is gaming or streaming Game of Thrones in the next room. Full fibre will provide us with the better broadband we need to ensure we can work flexibly and productively, without connections failing.

Further Information

This investment, announced at Autumn Statement 2016, will be in addition to the government’s £23 billion National Productivity Investment Fund aimed at improving productivity, which is key to raising living standards.

Traditionally in Britain, full fibre has been difficult to finance because the industry is relatively young and a lack of certainty around future demand makes investment hard to secure. This has held back alternative providers from entering the market and consumers have been left with limited choice, which in turn, has restricted their ability to benefit from this latest technology.

The fund, which is expected to more than double the government’s £400 million investment, and unlock over £1 billion of capital in the sector, will be managed and invested on a commercial basis by private sector partners, generating a commercial return for the government. It will ignite interest from private finance to invest in the sector, resulting in more alternative providers entering and expanding in the market.

Britain’s homes are mostly connected to the internet via underground copper wires to a green cabinet on the street. Full Fibre networks seek to run fibre connections straight to the doors of customers’ homes or businesses, via laser light flashes through glass or plastic tubes, making broadband stronger and more consistent. Unlike broadband run through copper wires which can be degraded by distance or the number of people accessing the internet at any one time, full fibre networks are much more resilient.

Peterborough was the winner of Smart City of the Year at the 2015 World Smart City Awards. It has a 120 km full fibre network, built by an independent network builder and operator, CityFibre, following a successful demand aggregation campaign, which saw 25% of the city’s businesses register an interest and enabled the network to be extended to all 6 of Peterborough’s business parks. Currently 300 sites of sites in Peterborough, including schools and hospitals, have been connected to the network. 4,000 businesses also have access.

With the Peterborough core network established and successful, benefiting from a motivated local authority and demand aggregation, the city is now a prime candidate for further extension of the network to residential areas, which the DIIF could help finance.

Two leading infrastructure investment firms have been appointed to manage the fund. Amber Fund Management Limited, part of the Amber Infrastructure Group, and M&G Investments, part of Prudential PLC. M&G Investments includes Infracapital, who have partnered with Cameron Barney; and M&G’s infrastructure debt team.

The government has worked closely with industry to create this fund, which by catalysing private sector investment will become self-sufficient.

Speaking on their roles as fund managers, John Mayhew, M&G Investments, says:

We are pleased to be working with HM Treasury in order to play our part in delivering world class, high-speed broadband infrastructure in the UK. This approach ensures that Britain is ready for the future and brings benefits to families and businesses across the country who rely on fast and greater connectivity, as well as ordinary savers through the returns generated for their pension funds.

Giles Frost, Amber Infrastructure:

We are delighted to be partnering with HM Treasury and look forward to helping the community of businesses building the next generation of digital networks to scale up and accelerate the rollout of ultrafast connectivity across the UK. Amber will apply its experience in implementing core economic and social infrastructure projects alongside public sector partners to deliver this landmark initiative.

Ed Clarke, Infracapital:

High-speed broadband is an essential ingredient in driving the competitiveness of the UK. Infracapital has already made significant investments in the sector, both in the UK and Europe, and we are delighted to be working with HM Treasury on this hugely important initiative, in partnership with Cameron Barney.

Those who are interested in accessing the fund are encouraged to contact the Fund Managers directly, who will be able to advise on how the investment process will work.

Communities Secretary Sajid Javid has announced guidance from the Director of Public Prosecutions not to prosecute tenants at Grenfell Tower and Grenfell Walk for unlawful subletting.

This would apply when any individual comes forward with information for the authorities about those who were in their flats on the night of the fire.

This follows the government’s commitment to do all that it can to support those who have been affected by the tragic fire at Grenfell Tower.

Anecdotal evidence from the community suggests that some of the tenants in the tower block may have been unlawfully sub-letting their properties. This may mean people are reluctant to come forward with valuable information that would help to identify anyone still missing.

‎The Director of Public Prosecutions, in consultation with the Attorney General, has now issued guidance to prosecutors not to bring charges for this offence, given the public interest must be in being able to identify the victims of the fire. The Royal Borough of Kensington and Chelsea has also confirmed it will respect this guidance.

Communities Secretary Sajid Javid said:

Supporting those affected by the tragic events at Grenfell Tower has been the absolute priority of the government. That includes making sure that loved ones still missing are identified. Therefore I would urge those with information to come forward without fear of prosecution.

Attorney General Jeremy Wright QC said:

Every piece of information will help the authorities accurately identify who was in the flats at the time of the fire. I hope this statement provides some much needed clarity to residents and the local community, and encourages anyone with information to come forward.

Director of Public Prosecutions, Alison Saunders, said:

It is a priority for investigators to establish who was in Grenfell Tower on that tragic day and it is crucial that we do everything possible to support them.

Guidance issued by the Director of Public Prosecutions makes clear that tenants of Grenfell Tower and Grenfell Walk who were sub-letting their properties on the night of the fire and who have, or do, come forward to the authorities so they can be confirmed as safe and or to indicate that others were resident in their flat when the fire took place, should not face prosecution for offences under section 1 of the Prevention of Social Housing Fraud Act 2013.

The inaugural Bar Council Employed Bar Awards ceremony on 30 June saw the award for ‘Outstanding achievement by a public service barrister’ go to GLD’s David Browitt (DfT Legal Advisers), and the first ever ‘Young employed barrister of the year’ confirmed as GLD’s Matthew Johnston (Home Office Legal Advisers).

The ‘Young employed barrister of the year’ award is for a barrister with under 7 years’ practice. The judges praised Matthew’s clarity, calmness, objectivity and expertise in his work, and his understanding of ministerial priorities.

The award for ‘Outstanding achievement by a public service barrister’ was open to the CPS, GLD, local government and public service defenders. The judges noted David’s clear leadership, energy and guidance in his work, his team working and his fine legal judgment.

Jonathan Jones said:

As one of the judges of the first ever Employed Bar Awards I naturally approached my role with complete impartiality. Nonetheless I was very pleased to see that a number of GLD lawyers had been nominated and shortlisted (I played no part in the shortlisting). And I am delighted that all the judges agreed on Matthew and David as the winners in their categories. The work that we do in GLD is unlike the work of any other members of the employed Bar, and it is fantastic that the achievements and dedication of our people are now being celebrated by the wider profession.

The full list of those shortlisted (which also included GLD lawyers Jamie Johnston and Tom Reveley, both of DfE Legal Advisers) and all category winners can be found on the Bar Council website.

Manufacture of the first three of these new highly capable warships will secure approximately 1700 skilled shipbuilding jobs in Scotland and 1700 jobs throughout the supply chain across Britain until 2035.

Defence Secretary, Sir Michael Fallon said:

The Type 26 Frigate is a cutting-edge warship, combining the expertise of the British shipbuilding industry with the excellence of the Royal Navy. We will cut steel on the first ship later this month – a hugely significant milestone that delivers on our commitment to maintain our global naval power. These ships will be a force to be reckoned with, there to protect our powerful new carriers and helping keep British interests safe across the world.

Backed by a rising defence budget and a £178bn Equipment Plan, the Type 26 programme will bring vast economic benefits to Scotland and the wider UK. The contract is structured to ensure value for taxpayers’ money and, importantly, now designed to protect them from extra bills from project overrun. The investment will secure hundreds of skilled jobs at BAE Systems on the Clyde for the next twenty years, and thousands of jobs in the supply chain across Britain.

The Royal Navy’s new Type 26 frigate.

These world-class warships will protect the nation’s nuclear deterrent and the Royal Navy’s new aircraft carriers, the first of which, HMS Queen Elizabeth, has recently taken to sea for the first time. The ships specialise in anti-submarine warfare, protecting the UK’s overseas territories and interests across the globe. The flexible design will allow the capabilities to be adapted throughout its lifespan to counter future threats.

The deal also reaffirms the commitment made by the Government in the 2015 Strategic Defence and Security Review (SDSR15) to build eight Type 26 ships. The contract for the second batch of five ships is expected to be negotiated in the early 2020s, paving the way to sustain further jobs in Scotland and across the wider supply chain for many years to come. The Type 26 programme will secure the long term future of the Scottish shipbuilding industry.

Admiral Sir Philip Jones, First Sea Lord and Chief of Naval Staff, said:

For an island nation, dependent on maritime trade, a strong Royal Navy is essential for our national security and economic prosperity. Today there are over 500 submarines in the world operated by 40 navies. As one of the quietest and most potent submarine-hunters of any Navy, the Type 26 will have a crucial role to play to protect the nuclear deterrent and our two new aircraft carriers.

Although designed to fight and win in the most demanding scenarios, they will also work alongside our international partners to protect and promote the United Kingdom’s interests around the world.

A Computer Generated Image of the Royal Navy’s new Type 26 frigate.

The Type 26 will be the most advanced anti-submarine warfare ship in its class around the world. The MOD is exploring potential export opportunities where there is strong interest from international customers.

The contract is specifically structured to motivate both sides to deliver to a successful outcome where both parties share in the pain and gain in the delivery of the programme. This will deliver better value for money for the UK taxpayer.

The MOD spent £1.5 billion with Scottish businesses last year and supports 9,700 jobs across Scotland. The Royal Navy’s new Queen Elizabeth Carriers are being built in Rosyth and the new Offshore Patrol Vessels are under construction in Govan and Scotstoun ahead of this summer’s Type 26 Frigate steel cut.