Housebuilding is back on the agenda
As the Conservative Party question why they got such a drubbing in the (outside London) local elections this month, some MPs have pointed to the housing crisis as one of voters’ key concerns.
When Boris Johnson’s Government came to power, they pledged to build 300,000 new homes a year, but they have fallen so far short of this that the target was dropped. Reasons have ranged from the lack of construction workers and materials to the opposition among residents in some areas to proposals for new housing or increased density near them. Others have argued that we don’t actually need that many new homes, because previous predictions about the level of household growth have been overestimated.
This last point raises a ‘chicken and egg’ question. Some research has concluded that the very reason for the reduction in new households is the shortage of homes. Many young people are remaining in the family home because they can’t afford private rents, while couples delay starting a family because they cannot save enough for a mortgage.
And of course, it’s not just a question of household growth.
We also need to take account those who are currently living in overcrowded, unsuitable and often unaffordable homes.
There are well over a million families on Council Waiting Lists, and at least a million private renters living in deep poverty because of high rents.
A concern which Advice for Renters has raised previously is the adverse impact of so much construction on climate change. There’s no point is having enough homes if the planet is no longer habitable.
Last month we argued that local authorities should be empowered to acquire homes at scale on the open market and promised to say more about how this might be paid for.
We have long argued that we cannot resolve the housing crisis without major reforms in our tax systems, switching the emphasis from earned income towards increasing tax on unearned assets. This issue has been getting more debate since it was revealed that those with investment assets of more than £40 million (known as ultra-high net worth individuals) trebled their wealth during and after Covid, while the vast majority of people saw their incomes drop leaving millions struggling to meet the cost of essentials.
“The UK is the fifth largest economy in the world but it’s the second most unsustainable of 36 major economies, due to high housing and childcare costs coupled with wealth inequalities that undermine social mobility.” Leading financial information experts, Bloomberg
We are pleased to note that there is to be a House of Commons debate on COUNCIL TAX & STAMP DUTY REFORM this week (17 May). These reforms alone won’t get the Cost of Living back on track but it would be an excellent start.
We should also remind ourselves that increasing tax revenues are not the only way to release money for housing. The housing crisis itself is not a cheap option. In 2020/21 local councils spent more than £1.6 billion on temporary accommodation, most of which went into the pockets of private landlords, so could not be invested in social rented homes. The BRE has calculated the health costs of poor housing at £1.4 billion a year.