As fears grow of a new house price bubble, Kathleen Kelly outlines a four-point to stabilise the housing market.
Our unstable housing market has been ignored and sidestepped for too long. Last night’s Panorama neatly encapsulated the problem that not building enough homes means both high house prices and high rents. Those high housing costs have a direct impact on living standards, with the number of people pushed into poverty by their housing costs growing for 20 years.
The simple fact is that the UK housing market doesn’t work. That much is obvious. What’s harder is getting everyone agreeing on a clear plan to fix it. It’s not all about those nasty planners, house builders, lenders or landlords. It’s also not all about those virtuous buyers or renters. But all do have their part to play in making the overall system work.
Neither should it be simply about political ideology. That’s why we need a certain amount of cross-party political will to fix the housing market. We won’t get that until manifestos are clear about what they will do about housing (not just about making us home owners and/or landlords). We won’t get that until the electorate makes it crystal clear that housing is a campaign issue.
So what to do?
Our evidence suggests that the following four points would be a step on the way to a better functioning housing market.
- Planners should take a more pro-active role in the land market together with a focus on growth management rather than urban containment. Cambridge shows what can be achieved through partnership working and a rolling infrastructure fund.
- We should use more effective stabilisers for house prices. This is as much about the signals Government sends (and cross-party support) as the actual reforms themselves. The first stage has to be a more grown-up debate about council tax revaluation.
- Better protection for consumers. This includes responsible lending (and borrowing) but also a more effective safety net for struggling home owners based on shared responsibility for provision. This might also include space for the private sector to provide more of the equity mortgage products that Government has recently monopolised.
- A better alternative to home ownership. There isn’t one answer here but a rental sector with sensible rents and decent-length tenancies is a good start. As is a better market for ‘second hand’ shared ownership and shared equity properties so that moving up doesn’t have to always mean buying out a full share. Fierce competition for the scarce supply of available homes hits those on low incomes hardest. Last night I was struck by how many people were ‘supported’ by help to buy – 42,000. This is while 54,000 were accepted as homeless last year: that’s the end result of housing market failure.
Without a step change in our attitude towards fixing the housing crisis we’ll stay locked into a boom and bust housing market, increasingly crowding out young, poor and vulnerable people.
To paraphrase a famous quote – the definition of madness is doing the same thing again and again but expecting a different outcome. Surely the time is right now to change the record on house price instability.