Tuesday, August 30, 2011

Britain's Broken Housing Policy

Floundering Tory Housing Minister, Grant Shapps, was given a good going over this morning on the Radio 4 "Today" programme.  The National Housing Federation (FED) had first drawn blood with a report published today that under present policies home ownership will decline by nearly 10% while prices will increase by over 20%.

The interview started with a recording of a speech by Thatcher to her Party conference in 1986 saying that the great Tory political reform of the 20th century was encouraging more people to own property.  Yet ironically this government's housing policy will reverse home ownership back to 1986 levels.

Actually I think it is a "good thing" that home ownership density is lower but there needs to be far more good quality, affordable and secure rented properties to take its place (and address existing shortages and overcrowding). 

Shapps argument was that he will increase supply by changes in planning and anyway these problems will disappear due to Britain's low interest rates which means mortgages are cheap.  He ignores the NHF prediction that prices will increase by 20% and of course very few people expect 0.5% interest base rates to continue for much longer.  House prices are already too high and even if supply was increased substantially, they will still remain unaffordable.  

What we really need is a housing policy something more like this.

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