Housing Crisis : Government White Paper “Too little, Too late”

13th March 2017 / United Kingdom
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By Alice Martin – NewEconomicsFoundation: Our housing system is broken, it’s called a housing crisis. Last month’s  white paper is a long-overdue acknowledgement of the scale of the problem, but it offers no solutions to the millions trapped in expensive, poor-quality homes.

Successive governments have thrown everything – including the kitchen sink – at growing home ownership. The last few years alone have seen additional subsidies for first time buyers, starter homes, cash incentives for developers through the infrastructure fund, right to buy discounts and extensions to housing associations.

But such policies have been directly responsible for the inflated prices, record low levels of homeownership, wealth inequality and bloated rental sector that now characterise Britain’s housing market.

Today’s proposals are an attempt to finally address the lack of security and crippling rents facing millions of people locked out of social housing and without a foot anywhere near the ladder. The government is plainly aware renters now outnumber home owners in many areas.

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But it’s too little, too late. Ministers seem content to tinker round the edges of a dysfunctional market that is ruining lives and distorting Britain’s economy.

WE NEED MORE CONTROL OF OUR LAND – NOT LESS

The government might have woken up to the problem, but they are wrong to think the housing crisis is down to a lack of land in the open market.

Big developers are already hoarding acres of prime real estate across Britain, making huge profits from rising land prices as they drip feed new homes to market.

It’s in their interests to build slowly. More deregulation of the planning system and subsidising infrastructure as the government has announced simply plays into developers’ hands and protects their profits – they will not deliver the change we need.

We have campaigned for land ownership transparency and welcome the Government’s support for this in the paper.

To address the housing crisis we need to have more, not less, control of our land. Instead of accelerating their public land fire-sale, as outlined in today’s paper, the government should be using existing assets to build the affordable, high quality homes we desperately need.

We calculate that if the government retained public residential land sites currently earmarked for sale and instead used them for community-led affordable housing projects, we’d save £25bn from the housing benefit bill alone.

We should be using public land for public good and putting local people – not big developers – in the driving seat.

This means:

  • Keeping public land for public good and planning developments led by communities and their councils that are of long term benefit to the area.
  • Creating homes that offer the long term best value to the area – not the short term “best value” of a one off cash receipt for a land sale.
  • Capturing the uplift of land value as a result of new developments for the good of the community.

This year we’ll be tackling these issues head on, helping community groups to have more control over land in their area, helping to solve the housing crisis.

 

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