Treasury's housing windfalls 'should be used to tackle growing homes crisis'

Launched at a special symposium in London to mark the 20th anniversary of The Duke of Edinburgh's Inquiry into British Housing, the report highlights policy shifts since the mid-1980s that include:

• the abolition of mortgage interest tax relief (MITR) – the cornerstone proposals from The Duke of Edinburgh's Inquiry – which has boosted tax receipts by £30 billion, plus a further £3 billion each year;
• receipts from the Right-to-Buy sales of council housing that have yielded around £45 billion – only a quarter has been recycled into improving public housing;
• Stamp Duty on property sales (plus a strong housing element to Inheritance Tax), which last year brought in £6.5 billion;
• more than £50 billion borrowed by housing associations from the private sector, which has dramatically reduced levels of public expenditure on loans for subsidised, social housing.

The report also notes how an improved economic climate with lower levels of unemployment has helped the Government to reduce its annual bill for helping low-income tenants through Housing Benefit.

Written by the Foundation's Director, Lord Richard Best (Secretary to The Duke of Edinburgh's Inquiry when it reported in 1985 and 1991), it argues the case for committing more of the Treasury's gains to tackle some of the increasingly acute housing problems now facing the country:

• While the Government has committed itself to increasing the supply of housing to combat shortages, the number of new homes built for rent from housing associations and councils is at its lowest level since 1925.
• Housing associations are now responsible for all new 'socially rented' accommodation, but their output has fallen below 20,000 homes a year, compared with 50,000 a decade ago.
• Besides helping to increase the supply of affordable housing, the report argues that Treasury funding is needed to improve the 'safety net' for low-income home-owners who would risk major mortgage arrears problems in an economic downturn.
• Projections in another JRF report being launched today suggest that a recession comparable to that in the early 1990s would lead to mortgage arrears at a fifth higher than they were in 1992.

When calling for the abolition of mortgage interest tax relief 20 years ago, the Inquiry into British Housing recommended a scheme for home-owners, similar to the Housing Benefit arrangements for tenants, to protect them against homelessness if they could not keep up their mortgage payments. Although mortgage interest tax relief was phased out by successive governments, the inquiry's balancing proposals for some of the money saved to be recycled into housing have never been implemented.

HRH The Duke of Edinburgh will be speaking at a lunch at today's symposium at the Royal Society of Arts. Speakers during the afternoon session will include Yvette Cooper MP, the Housing Minister at the Office of the Deputy Prime Minister. Three former housing ministers will also be attending.

Speaking before the event, Lord Best said: "As we commemorate the 20th anniversary of the Inquiry into British Housing, the contrast between large financial gains to the Treasury from changes in housing policy and the continuing importance of meeting housing needs is very striking.

"If only a modest proportion of the Government's increased revenue were to be recycled to boost the supply of affordable homes for rent and low-cost ownership, and to improve the safety net for low-income home-owners, it could make a vital contribution to defusing the growing crisis in British housing."