This report, commissioned by Molly and written by Tom Chance, identifies what lies behind the UK’s housing crisis and looks at some of the solutions used to address housing problems in other EU countries.
In the UK, every generation reaching adulthood since the 1960s has stood less chance of owning a home than the one before them. The proportion of household income spent by families on housing has tripled in those decades. For thirty years, British governments have looked to the market to solve most problems, but things have only become worse. All the political parties in government over this period have been complicit in this failure.
The government recently launched a White Paper which acknowledged that the housing market is broken, and private developers won’t build the problem away. But they have not yet made a decisive break with the failed policies of the past. To decisively break from the broken market approach of the last 30 years, the Government could learn from our EU neighbours and this report sets out some European housing policies that could help the UK government, if they finally decide to tackle our broken housing market.
The report also makes some clear policy recommendations:
- Scrap market subsidies. Tax breaks for landlords’ mortgages and schemes like Help to Buy should be scrapped to stop public money pushing up prices.
- Invest in social housing. Money saved from the above should be put into schemes to deliver more genuinely affordable housing including social housing, and councils should be freed to borrow to prudential levels, increasing total investment levels to at least £6 billion per year.
- Reform land and property taxes. The UK could use these to stabilise the housing market. We could replace Stamp Duty, Council Tax and Business Rates with a Land Value Tax, for example. This could start with taxing vacant brownfield land, or a property and land speculation tax.
- Give the Bank of England a role. The Bank should have a duty to aim for stable house prices, giving thought to this when setting interest rates or pumping money into banks through quantitative easing.
Read the press release here.
Read the full report here