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Brokenshire: let young people use their pensions to buy homes
Young people should be allowed to dip into their pensions so they can afford to get on the housing ladder, the housing secretary James Brokenshire has said.
Speaking at an event hosted by the think tank Policy Exchange, Mr Brokenshire said the country needed to look at allowing people to use some of their pension pot as a deposit to buy their first homes.
He said: “It seems rather obtuse that we would deny people the opportunity to do this, given that we know those who own their own home by retirement are on average wealthier and do not have the burden of the largest expense in retirement – accommodation.”
Last week, home secretary and former housing secretary Sajid Javid confirmed he would be running for the leadership of the Conservative Party when Theresa May steps down on Friday. Dominic Raab and Kit Malthouse, the former and current housing ministers, are also in the running for the top job.
Mr Brokenshire confirmed he would not be running to become leader. He said he would instead be using his speech to “offer a few personal ideas any leadership contender should consider seriously to help empower consumers in the housing market”, including his views on using pensions to pay for housing deposits.
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The housing secretary pointed out that the average 35-44-year-old has £35,000 in their pension pot – in London, where the housing crisis is most severe, an average deposit is more than £80,000.
Meanwhile, a report released in August last year by another think tank, the Centre for Policy Studies, found that British households are already saving the lowest proportion of their incomes since records began in 1963.
Another of Mr Brokenshire’s proposals was that the government should make it “easier” for lenders to take into account consistent rental, credit card, council tax and phone bill payments when issuing mortgages.
He claimed that these two suggestions were “arguably on the scale of Right to Buy” in terms of significance.
Mr Brokenshire also used his speech to call on some of the contenders in the leadership race to drop out.
He said: “I say gently to some of my colleagues who have put themselves forward for what has been described as the Grand National of political contests: ‘Please think carefully. If you already know it’s going to be a bit of a struggle to get over the first fence, let alone Becher’s Brook ahead, then maybe you should pull up.’”
