A Home Individual Savings Account, An opportunity for the English underprivileged?

De Koning, Kees (2014): A Home Individual Savings Account, An opportunity for the English underprivileged?

Abstract

In the U.K. public housing policy has sought to achieve (at least one of) three distinguished goals: to provide shelter and accommodation for all families, to encourage home ownership and to encourage construction as a tool of counter-cyclical macroeconomic policy.

Over the last decade, individual households in England and Wales, especially the young and the below-median income ones, have struggled to buy or even rent their homes. For the most needy, income support and housing benefits are being granted to enable them to pay rent.

More recently the U.K. government established a scheme to help first time buyers to get onto the property ladder.

No scheme exists however, which would help the underprivileged to save more when house prices and rents rise faster than average wages. Such a scheme could be called the Home Individual Savings Account or HISA. The scheme will help to nullify the gap between average house price movements and average wages. Who could be eligible for participating in the scheme and how it could work is set out in this paper.

• Item Type: MPRA Paper
• Language: English
• Keywords: Home Individual Savings Account (HISA), savings depreciation, U.K. house prices and wages movements, underprivileged income earners, U.K. housing policy
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis

References

References:

. Institute of Fiscal Studies, London, 2014, Budget document Chapter 5: Housing Markets Trends and Recent policies by David Chandler and Richard Disney (IFS)

. U.K. Office of National Statistics, Average wage Statistics 1999-2013

. Nationwide average house prices in England corrected for CPI inflation, Published by Housepricecrash.co.uk owned by Fubro, Hampshire, U.K.

. Institute of Fiscal Studies, London, Article by Paul Johnson, Director IFS: “The youth have done badly while older people have done relatively well”