We have a housing crisis. On just about every indicator, the direction of travel is wrong.
We need to build 250,000 new homes a year and in recent years have been building half that number.
Housing costs as a proportion of earnings remain unsustainably high.
We are spending ten times more than Germany subsidising housing costs.
UK housing benefit has doubled in a decade to £24.2bn.
Last week, Conservative Housing Minister Brandon Lewis claimed that his Housing and Planning Bill would ‘get one million homes built by 2020…. transforming generation rent into generation buy’.
The ‘1 million new homes in this Parliament’ promise has simply been plucked out of mid-air and there is no chance of this being achieved without a significant investment in social housing.
Instead the Government seems obsessed with reducing the number of homes to rent by forcing housing associations to sell their homes to tenants and forcing councils to sell even more homes to pay for the discounts given.
Meanwhile, David Cameron proudly proclaims his new Starter Homes’ initiative as a way of gettinghouse building increased.
These are set to cost no more than £250,000 outside of London and £450,000 within London.
Starter homes at £450,000?
Cameron thinks that this is ‘affordable’?
It’s no wonder that ordinary people think politicians are out of touch.
Even these homes won’t be additional but will be built instead of the affordable rented homes developers have to build when they get planning permission.
Where are families who can’t afford to buy supposed to live and bring up their children?
Tackling the housing crisis requires some radical interventions including acting decisively to tackle the absurdly high cost of land.
Where planning permission is given for housing on a green field why should a farmer suddenly get a windfall because the use of his land is changed from providing crops to providing homes?
In the 1947 Planning Act the principle was enshrined that the landowner would receive the current use value of land when planning permission allowed a change of use, plus a helpful top up.
It’s the public purse which should benefit from a decision taken by a public body which increases land value.
That extra money can then be used to help keepland prices lower.
Denmark and Germany have led the way in addressing the challenge of bringing housing land in to use at lower prices, using land value taxes and planning powers.
It’s little wonder that they can deliver house-building rates double or treble ours, whilst cutting the cost of housing.
If they can do it, so can we.
Building enough new homes is a huge challenge.
Getting a fair deal for taxpayers is an even bigger challenge.
Land value reform now has to be on the agenda.