Updated Nov 2016
A well-functioning housing market should provide a range of flexible solutions that work for everyone.
A new approach to every area of housing policy
The UK is not currently building anywhere near enough new homes to cope with demand. Private house building levels were already too low before the crash and have not recovered from dramatic drops at that time. A combination of ‘Right to Buy’, restrictions on councils’ ability to borrow to build, and new constraints on housing associations, has led to social housing levels plummeting so they are not filling the gaps. As a result of the scarcity of supply, people are increasingly pushed into the under-regulated and insecure private rented sector. Increased demand in this sector has led to spiralling rents in some parts of the country.
In parts of the country with pressurised housing markets, people who do own their own home have seen it rise in value significantly. But with housing affordability continuing to worsen, their children are less and less likely to enjoy the same financial independence, with two, three or even four generations increasingly living under the same roof.
Ultimately the solution is to build more homes - but it is not that simple. The government must change its whole approach to valuing and taxing land, and the incentives that currently skew the system away from encouraging building.
Solving the housing crisis will be as essential part of building a fairer society and better economy. Doing so will need a complete change in policy and approach.
Local solutions are key to solving the housing crisis
The UK should shift public spending on housing from benefits to bricks. Money spent on housing benefit leaves government at all levels vulnerable to economic shocks and political pressure. It would be better to shift this spending over time towards investment in new homes and the best way to do this is by decentralising control over housing and welfare policy. We believe the best way to do this would be by establishing an Affordable Housing Fund through which local authorities can rebalance the housing benefits payments and house-building investments to suit local circumstances.
Ensuring that local authorities have the power and money to stimulate local development would reinvigorate the market across the country. It would also ensure that local areas have the flexibility to develop according to local need and to build in the places where homes are most needed.
The UK needs a private rented sector that offers a genuine alternative to home ownership
There are now two million more households living in private rented accommodation than there were a decade ago. It is therefore vital that it delivers secure, affordable and high-quality accommodation for tenants. The government should reform the private rented sector so it tips the balance in favour of the rights of the tenant, allowing tenants to feel more secure in their living arrangements. Councils should seek to make deals with local landlords and form Community Housing Agencies to drive quality improvements and reduce costs in the private rented sector.
As well as building more housing, there should also be a concerted effort to bring empty homes back into use. At a time when there are so many people on housing waiting lists, the government should make it much harder to allow properties to stand empty. This might include measures to increase local authority discretion on what is classified as a long term empty property and removing the cap on the ‘empty homes council tax premium’.