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A vision for housing needs to look at evidence not to rehash inappropriate policies?

Last month the Church of England and the Nationwide Foundation published a report - 'Homes for All: A Vision for England’s Housing System ‘.  Although the report outlined the various problems in housing – high house prices, high rents and poor conditions, it reverted to the usual but incorrect conclusion that the cause of these issues was that too few dwellings were being built and therefore the solution was to build more.




 
Let us deal first with the shortage of housing question. 
With regard to housing supply, the report states “There is broad consensus that England needs a minimum of 300,000 additional homes per year,..".  Yet this is a contested policy. The figure is one plucked out of the air and the apparent ‘consensus’ is the result of similar free-market groups and supply side academics singing in unison with their views repeated without question by the media and politicians.  Glen Bramley, is cited as a source but he is a supply side supporter.  
 
The report glibly asserts “This lack of supply has direct consequences for the cost and affordability of our homes.”  Yet the evidence suggests that the interplay between interest rates and asset values is the main cause of rising house prices. Despite its importance, this approach is not mentioned. Disparities in income are also a factor influencing access to housing.
 
The ‘waiting list’.
Reference is made to the ‘waiting list’ total estimated at 1.21 million households.  But the report fails to recognise that the list includes households with different reasons for being on the list. These include poor quality housing, high housing costs, a need for a different type of property. Different solutions are needed to address these problems, they do not necessarily require building a new property. 
 
Omissions
The report fails to examine some significant issues – there is no reference to second homes, holiday lets or buy to let. Neither does it refer to the number of vacant properties in England where the 2021 census indicates a total of 1.35 million dwellings an important source of housing.  Other omissions include changes to welfare rules making it harder for people to afford housing and the stricter criteria which have limited the ability of first time buyers to get a property.
 
Policy pointers
If we are serious about improving the housing situation we need to address the underlying issues and produce credible proposals.
 
Options include:-
Reform of the mortgage market – a useful guide here is Mulheirn (2022). 
Improvements in welfare support in relation to rents.
Bringing vacant properties back into use.
Reducing the number of second homes and holiday lets.
Removing the Section 1 no-fault evictions for private renters.
Investment in improving housing conditions in existing stock in both the private rented and owner-occupied sector.
Increase the share of new dwellings built which are affordable/social housing.
Strict controls on developers to ensure the priority is affordable housing not luxury housing.
Taxing the surplus which arises when owners move from a higher price area to a lower price area. This, referred to as an enabling tax, would limit the benefit which home owners selling properties with a high value get when moving to lower price areas.
 
The report
[Extracts]
There is a shortage of market and social housing, and an acute lack of affordable homes. This is most keenly felt in London and surrounding areas but is a growing – and sometimes chronic – problem throughout England. There is broad consensus that England needs a minimum of 300,000 additional homes per year, but during the period 2018-2022, only 842,980 homes were completed.5 This implies a backlog of 657,020, which means the number of homes we need to build each year is now even greater.6
 
Over time, high and accelerating home prices, land prices and rents concentrate housing wealth and exclude many millions of people from home ownership. This is evidenced by the fact that average house prices in England have increased from £71,000 in Q4 1992, to £178,000 in Q4 2002, to £237,000 in Q4 2012 and to £339,000 in Q4 2023.19 This is an increase of 377%. During the same period median household disposable incomes across the UK rose by only 51%.20
 
 
Now: Shortfall of 657,000 new homes
 
Now: 1.2 million households on local authority social housing waiting lists
 
The most recent discussion of these issues is provided by Bramley, G. (2024) How much housing do we need and how should we provide it? in M. Stephens, J. Perry, P. Williams and G. Young 2024 UK Housing Review, Chartered Institute for Housing.
 
Lack of investment in our existing homes is harming people’s health: 14% of homes fail to meet the Decent Homes Standard and 10% of households are being exposed to the highest level of health and safety hazard, putting them at risk of serious harm.
 
Sources
Church of England and the Nationwide Foundation, April 2024, Homes for All: A Vision for England’s Housing System
 

 

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