The feral nature of the UK’s long term housing policy

I keep waiting for someone in the Labour Leadership contest to pick up on housing as a key issue. That they haven’t is probably as much a reflection of the fact that its a classic wicked problem (with tenticles that reach far into economic policy).

Angela McGowan of the Den Danske Bank nails the wickeness of the GB problem as well as anyone I’ve seen elsewhere, not least by contrasting it with Northern Ireland where the public sector is still taking up a significant part of the slack through the Housing Executive:

The new UK government has introduced some small housing policies in the July budget which are aimed at improving the supply of housing. For example, local authorities were given more power around planning and a new zonal system is also to be introduced to encourage more building on brown-field sites. But don’t expect these small policies to change the GB housing landscape anytime soon.

The housing problem in Britain is currently being exacerbated by the fact that any housing supply side policies are being pitched against other UK government policies which are fuelling the demand side of the housing market. For example, the government’s recent budget announcement that homes worth up to £1m will be exempt from inheritance tax will further encourage people to invest in bricks and mortar.

The Conservatives’ pre-election ‘Right-to-Buy’ promise for council tenants will also put additional pressure on the supply of social housing and force many social tenants into the private rented sector where rents are higher.

  • Niall Chapman

    All of the Labour candidates opinions on the housing market from 29:33, allbeit not in great detail:

  • T.E.Lawrence

    Its a political hot potato issue for any political party and government not only the Labour Party ! The Labour Party when they were in power forecast a target of 250K new houses to be built per year. We are only achieving 150K New Build per year. One of the excuses cited for not achieving the targets is the slow and bureaucratic planning permission systems of local authorities. Some wish to also relax rules about building on the Greenbelts of cities.
    Right to Buy will only help existing tenants the right to purchase their homes without doing anything to solve the shortage in overall housing supply.
    This shortage of stock shall keep house prices rising and out of reach of many of the citizens of the country and if not addressed correctly future generations.
    It’s going to take ‘balls’ at the highest Party Level to declare in any manifesto that the “State” shall now take full control of New House Build cutting out Local Authorities Red Tape and trying to hit them Labour Targets !

  • Brian Walker

    Mick, I know it sounds like the worst of Slugger pedantry but planning and housing development are devolved. So not entIrely “UK”. Granted inheritance tax is not devolved. But in NI, not too big an issue there I think. What will the US financiers Cerberus do with their £ 1.2 billions worth of NI Nama disposals?

  • Pat Mustard

    It’s a dilemma for all parties: land is at a premium and developers hover around waiting to snap up anything available. There is plenty of brownfield sites available which, if released for development, would provide affordable housing, but those houses are quickly bought by ‘buy to let; investors, happy to pay a premium, and those people are the tories pals.
    It’s too frightening for any party to contemplate doing something that lowers house prices, but our kids have no chance of getting a foot on the ladder if they don’t. It’s all bound to end in tears.

  • Reader

    “Foot on the ladder”. That’s part of the problem – seeing home ownership as an end in itself. The supply of houses is the rest of the problem.
    “Buy to Let” shifts houses from the homeowner to the rental side [not a problem]; “Right to Buy” shifts houses from rental to homeowner [also not a problem]. We need more houses – that’s the problem.

  • T.E.Lawrence

    Don’t disagree with your stradegy Reader to run both options in parallel with each other but for it to work and be successful I think it requires the “State” to take control of New Build from local authorities for both Public and Private Development.and cut straight through the Red Tape Crap at present.
    State : Borrow – Build – Rent or Sell (No Profit) – Pay Back Loan

  • aquifer

    Some more house sharing would align supply and demand better and quickly. Maybe we need a cloud based App to share household expenses, or some coaching in how much we need to save to get a pension, rather than struggling to buy early or bouncing around in a house that is too big for us.

  • barnshee

    “seeing home ownership as an end in itself”

    An “end” where one is not subject to the whims of landlords?

    People who have never experienced the vulnerability of living in rented accomodation need to appreciate the security home ownership provides

  • Reader

    I’m a homeowner – I had the resources and long term plans in place to make that my best option. But suppose I had to move around to chase jobs, or build a career. Or suppose that treadmill still didn’t give me a secure income? For some people, renting is the best option. For others, it’s the only option.

  • Slater

    The growing, unplanned population of the UK (including now Northern Ireland) is the key aspect. As it cannot be mentioned the discussion may as well end here.

  • barnshee

    Can`t have things like responsibility appearing human rights you know

  • As a recent homeowner, I can see both sides of the argument here.
    I bounced around rented accomodation for years when I was a single man, house & flat shares abounded with work colleagues, uni mates etc and to be fair, as long you’ve a bit of consideration for those around you, it’s not an issue. But good room mates and good landlords can be hard to find. As I’m sure any Landlord would say the same about good tenants.
    Coming into my late 20’s and settling down with my now wife, I obviously needed to look at a more settled existence. Moving back in with family wasn’t an option.
    From 30 – 35 I scrimped and saved and lived like a monk. I worked 2 jobs and had to pay rent as well as save for the 10% deposit for a mortgage. ( essentially doubling up the amount I had to put away, ) as well as some excess for home repairs and because we didn’t want to be ” cornflake people ” – the mocking term given by builders to those who got themselves into so much debt to own a house that they can only afford to eat cereal.
    I now own a nice house ( which will look even better when I’m done with it ) and to be honest, those barren years were worth it. But they were REALLY tough at the time and there were times I really wasn’t sure if I’d make it to the point where I’d be able to even apply for a mortgage.
    I never subscribed to the theory that I HAD to own a house, I made that decision when my life took me that way.
    Thing is though, with 2 jobs and a much reduced lifestyle / social life I still really struggled to get that capital together.
    I’m not particularly well informed as to the nuances of social / affordable housing, but I do know this. My house has already allegedly increased in value since I bought it 18 months ago.
    Feeling that you need to own a home, but won’t ever be able to does generate a feeling of hopelessness.
    I don’t think everyone needs to own and I don’t think those that need to own need to own a dream house, but buying a home for your family should at least be something that you see as within the realms of possibility.