The Housing Crisis and How to Solve It

Gavin Barwell, Croydon Central MP and grandly titled Minister for Planning and Housing is not expected to solve the housing crisis with the government’s White Paper due later this week. In all probability, he will follow the pattern of neglect and naked electioneering set by successive New Labour, Coalition and Tory governments and just make things worse. The crisis is, nevertheless, extreme. Social housing is disappearing into government coffers and buying is unaffordable except for a privileged few – house prices in 122 local authorities are now ten times local median earnings (Source: ONS figures quoted in the Guardian) while the briefest of tests on the money advice service affordability calculator will confirm that lenders won’t lend much above three times earnings. This leaves most young people facing the prospect of never leaving home, a lifetime renting on short-term contacts in the unregulated private sector, a job in the armed forces or a life on the streets. This is a somewhat restricted set of choices from a government that says it believes in choice.

The housing crisis can, of course, be solved, but not in ways that would be agreeable to Mr Barwell and his paymasters. Instead of nibbling away at the green belt and further inducements to speculative builders, we need

  • an immediate extension of council tax banding upwards as a prelude to introducing a comprehensive Land Value Tax.
  • appropriate taxation of second homes, holiday homes and empty commercial property
  • Councils to be empowered to borrow to finance such social (council) housing and compulsory purchase of existing properties as are needed to meet all their local needs.
  • an end to the bedroom tax.
  • mortgagors to be entitled to convert mortgages into affordable rents rather than face eviction
  • recognition that housing has a central role to play in the environment and the fight against global warming
  • proper regulation of the private rented sector, with an end to short-term tenancies, rent control where appropriate and certification of “good” tenants by landlords and “good” landlords by tenants, this certification being required for continued participation in the sector. I have been told that this approach is successfully applied in Germany, but if anyone knows more about it, please let us all know.

These are not revolutionary demands. They are the minimum reforms needed to alleviate the current crisis. If they are beyond the capacity or imagination of our ruling class to implement, the sooner we overturn them the better.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s