Fixing a Broken Housing Market! Radical Report offers an Option
The Conservative Think Tank, Onward, issued its first report recently, which lobbies for a fundamentally new approach to increasing housing supply aimed at reversing fifteen years of falling home ownership and encouraging developers and councils to build the kind of homes that Britain needs.
The radical report entitled, “Green, pleasant and affordable”, claims that the growth of the buy-to-let market in recent years has prevented two million families from becoming homeowners, and calls for government action to stop people buying homes as an investment by abolishing tax relief for landlords and clamping down on overseas buyers.
Their 10 point plan offers a new approach to improving supply by increasing the powers given to council’s to buy land to develop new villages and towns, and recommends building discounted housing which prioritises young people with families in the immediate development vicinity.
In a finding likely to raise pressure on ministers to increase building, the report also noted that France has built twice as many homes each year as Britain since 1970 – a total of 7.8 million more. As a result, house prices in France have risen at only half the rate they have in the UK, while rents are also significantly lower.
This comes as Sir Oliver Letwin MP published an independent review, commissioned by the Ministry of Housing, Communities & Local Government, looking at the cause of the gap between housing completions and examining what can be done to speed up the slow rate of house building on major sites.
His study warns that developers are slowing the system down by limiting the number of new built homes that are released for sale at any one time, a practice known as the ‘absorption rate’ that is designed to prevent a glut of new built homes driving down prices in the local market. However the report suggests that by increasing the choice of design, size and tenure of new homes, developers could increase build out rates without impacting on the local market.
The draft analysis then goes on to suggest that a shortage of British bricklayers will have a “significant biting constraint” on the Government’s plans to boost the number of new homes built from 220,000 a year to 300,000, and called for an extra 15,000 bricklayers to be trained during the next five years.
A recent report from the Federation of Master Builders found that 58 per cent of firms are currently struggling to hire bricklayers; 55 per cent are having trouble hiring carpenters and joiners; and 40 per cent are finding it difficult to hire plumbers.
Sir Oliver Letwin summarised by saying: “It is clear that the main cause for delay is the absorption rate. We found that if house builders were to offer more variety of homes and in more distinct settings then overall build out rates could be substantially accelerated.”
Housing Secretary James Brokenshire MP, commented that he was particularly interested to see that increasing the choice of design, size and tenure of new homes could help to speed up build out rates, and said he looks forward to receiving the final report in the autumn.