Tackling housing market volatility in the UK. Part II: Protecting households from the consequences of volatility

The UK housing market has exhibited persistent price volatility over the past 40 years, which has had deleterious social and economic consequences. These are felt most acutely by home-owners with mortgages. A goal of the Housing Market Taskforce was to find ways to create a socially sustainable housing market. Key aspects of this would be a better protection for home-owners and suitable alternatives for people who cannot safely access ownership. This article examines ways in which home-owners could be better protected from the consequences of volatility, through a mixture of prudential lending, responsible borrowing and an improved safety net. It also examines whether the private rented sector is capable of providing a safe alternative to full or partial ownership, and concludes that this is unlikely. Consequently, the role of the social rented sector remains crucial for providing security for those people who cannot access full or shared ownership safely