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Capital cities
By
Anthony Breach
| 11 June 2019
Capital cities
By
Anthony Breach
| 11 June 2019
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Executive summary
Introduction
How does housing wealth vary in cities across England and Wales?
Figure Figure 1: Average housing equity 2013 and growth to average equity 2013-18
Figure Box 1: Housing equity and methodology
Figure Table 1: Summary of changes in housing wealth across England and Wales, 2013-18
What has driven growth in housing wealth across city economies?
Figure Housing equity has increased the most where demand has been stoked by strong economies
Figure Figure 3: Growth in housing equity and resident wages, 2018
Figure The supply of new homes is not linked to cities’ demand for housing
Figure Figure 4: The housing market in England and Wales
Figure Figure
Figure housing wealth
Figure Figure 6: House prices across selected cities since 2003
Figure Figure 7: Mortgage lending’s association with the local economy
How do housing shortages drive inequality between and within cities?
Figure and South
Figure Housing shortages sharpen inequality for renters, who tend to be younger
Figure Figure 8: Rents’ relationship to housing wealth
Figure Figure 9: Home ownership for under-50s as a share of those in private housing, 2011
How have political choices deepened wealth inequality across cities?
Figure The planning system creates housing shortages
Figure Policy supports homeowners, not home ownership
Figure Figure 10: Change in home ownership as a share of private housing, 1981 to 2011
Figure Homeowners use the planning system to block new homes and make inequality worse
Figure Higher rates of ‘affordable housing’ cannot address wealth inequality because their objective is not to slow growth in housing wealth
Figure Monetary policy choices are not responsible for housing wealth inequality, but housing shortages increase structural risk in finance
Conclusion and policy implications
Figure The planning system must be reformed to allow housing supply to respond to local demand and reduce inequality
Figure Homeowner tax breaks and subsidies should be reduced
Figure Government should explore alternative wealth-building vehicles to housing
Figure Nimby campaigns’ influence in the planning process must be reduced because they deepen wealth inequality
03
2: Average equity in 2018 versus owner occupation as a share of private housing in 2011
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