"A refreshing addition to the world of think-tanks" Daily Telegraph, 18/10/2007
PROGRESSIVE views on ...
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HOUSING
Last updated: 26/03/2008
Government involvement in housing has only delivered poor quality housing, lack of community and high demand.
Rising housing prices have been a real bonus for home owners; however those who do not own property have been greatly disadvantaged by government policy. Unfortunately the response of many politicians to the problems is to increase government involvement in the housing market, exacerbating the problem.
The problem of housing in Britain is a problem of supply. More houses need to be built and government policies that are restricting new developments are needed.
Planning laws need to be overhauled to allow increased house building while protecting vital green belts. However, within urban areas – except for areas of historic significance, planning laws need to be relaxed to give developers certainty and allow for innovation. It is widely accepted that high density housing is required, but the high density experienced by state housing schemes is certainly not desirable. High density can be built well and be extremely desirable – this is best left to the private sector to build and own.
The high level of state ownership, in many guises, of housing restricts flexibility in the development of new housing and creates anti-social environments. Central government, councils and housing associations should sell their existing housing stocks and exit the market. Much is correctly made about the desirability of home ownership for stable communities, but often overlooked is the desirability of private landlords. Private landlords have a vested interest in having housing in good upkeep, which maintains the desirability for tenants and therefore maintains good rental returns. Houses owned by private landlords also tend to be interspersed with owner occupiers creating a more stable community. People who need assistance in paying for their rents should receive a transparent payment from the government. However the government not be overly generous with such payments as they can keep up rental prices rather than allowing them to fall to a level people can afford.
Government attempts to social engineer often backfire. Requirements that developers include a certain amount of “affordable housing” in new developments only serves to increase the costs of development. The state should not care if a developer builds an apartment complex with half million pound apartments. The affluent households moving in vacate a similar number of properties creating opportunities for those looking for cheaper housing. Terms such as “key workers” are offensive to the majority of people who don’t work for a government agency. The concept is merely a cover for underpaid government employees and acts as a hidden subsidy. Government employees, such as police and nurses should be paid proper market wages.
Home Information Packs (HIPs) are an unnecessary cost and bureaucratic hurdle for sellers. These costs are inevitably passed on to the buyer and deter liquidity in the housing market. The problem of gazumping can be better addressed through contract law and particularly through conditional contracts – where as long as expected conditions are met the contract becomes unconditional. HIPs also breach the level of personal privacy people expect about their private affairs.
Liquidity in the housing market is also hindered by stamp duty and this should be scrapped. Not only is stamp duty an unfair impediment to first time buyers, but the tax deters people from moving to new housing freeing up the housing stock.
KEY POINTS
• High house prices are acting as a real barrier to home ownership to many.
• Government regulation is slowing the construction of new houses.
• Concepts such as “affordable housing” and “key workers” should be abolished.
• Home Information Packs should be abolished.
• Stamp Duty scrapped
• Home ownership is desirable for creating stable communities.
• Home ownership is desirable for creating stable communities.
• Private landlords have a higher commitment than the government to maintaining high housing standards.
• Government and councils should exit the housing market.
• Planning laws should be streamlined
and simplified.
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High density doesn’t have to look like this:
In fact it can be highly desirable:
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