The UK's housing system is fundamentally broken and needs far-reaching wide-scale, holistic reform to deliver fair, affordable and flexible housing in the future.

This is the stark conclusion of a policy document published today by the Chartered Institute of Housing (CIH), which makes over 20 recommendations to reform the housing market. The document has been produced in response to a proposed Government Green Paper on housing reform to be published later this year.

CIH Director of Policy and Practice, Richard Capie said: "If the credit crunch has done anything useful it has pointed out in stark terms that housing has had fundamental problems for many years - problems we've glossed over. It has also reminded us that if we get it wrong, the whole economy suffers. There are few hiding places and everyone and everything is affected.

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"We need a housing market that we should aspire to and one that would make better and sustainable use of our twenty six million homes. We are calling for a housing system that would expect banks and financial institutions to work within a system of responsible lending to responsible customers. Builders and developers would work more closely and effectively with local authorities and communities to build the right types of housing, with greater transparency about what each party is getting from the deal.

"House buying should become simpler, but with greater choice and new flexible approaches to tenure. The process should be supported by a real estate sector which works in a system that recognises the full financial and social impact on people’s lives if they make the wrong choice. More and better advice and education should become standard for everyone so they can plan their housing and financial commitments over longer periods, if not lifetimes.

"No part of the housing system should be left untouched by change - whether private or social housing. Tinkering at the edges is not the solution - change should embrace all tenures and firmly put the interests of tenants and residents to the fore. Social housing should no longer be populated by a majority of people unable to progress in their housing and wider aspirations. Instead it should be a unique opportunity - a two-way, flexible stepping stone that responds to changes in people’s lives and that is better linked to private, shared, low cost or full home ownership."

(CD/JM)