Call for ‘truthful rethink’ on housing affordability as experts criticise outdated metrics

A leading housing expert has criticised the industry’s approach to affordability, warning that outdated metrics and misleading rhetoric are distorting public understanding of the housing market – and undermining efforts to support homebuyers.

Kate Faulkner OBE, founder of Propertychecklists.co.uk and one of the UK’s most prominent housing analysts, says the system is overdue a fundamental rethink.

OUT OF DATE

“The measures and language we use to assess housing affordability are both out of date and inaccurate,” she said. “It’s time we started telling the truth.”

Faulkner was responding to recent remarks by Patrick Bunton, director of later-life lender LiveMore, on LinkedIn who argued that regulation is increasingly preventing “sensible people from doing sensible things.”

Pat Bunton, Livemore — Patrick Bunton, Livemore

Bunton criticised the recent decision to raise lending caps from £100 million to £150 million as “meaningless in the grand scheme,” and called for a radical review of the regulatory framework.

For example, why do Retirement Interest Only mortgages fall inside the LTI Cap, whilst second charges and Lifetime mortgages (where interest is serviced from day 1) don’t?

Faulkner agreed that the debate is stuck in the wrong place.

PRICED OUT

“We keep telling first-time buyers they need 15–20% deposits – then produce analysis that shows how unaffordable that is for someone on an average salary. It’s no wonder people feel priced out.”

She argued that national averages distort the picture.

“Why don’t we stop quoting average house prices and average deposits, and instead focus on actual regional affordability? There are many areas where homes are affordable – but you wouldn’t know it from the headlines.”

RENT VS BUY

She also called for more transparency in the rent-versus-buy debate.

“Here is a radical idea… why doesn’t the industry stop using average house prices and average deposits?

“Properties are way more affordable than most of these stats suggest in most regions. Then we can focus on schemes in areas where they aren’t… such as London, Edinburgh and Bristol and the like.

“Also why don’t we publish accurate stats on renting versus buying rather than saying it’s cheaper to buy than rent because buyers have a 20% deposit and this doesn’t earn much in savings if renting?

“Our rhetoric and measures on housing affordability are out of date and inaccurate. Let’s tell the truth first, then work out the areas that need more help!”