The housing crisis has been a sticking point for several successive governments, with politicians putting forward proposals for more properties without actually easing the problems. Different governments have tried various methods from trying to tax landlords out of the market to actually building starter homes to help Generation Rent get onto the property ladder. Now ministers Philip Hammond and Sajid Javid have announced a £5 billion fund to build 40,000 new homes by 2020. Some of the money will be used to encourage small family firms to build 25 homes, while the rest will pay for building on surplus public sector land, brownfield sites or abandoned shopping centres, for example. The idea is to encourage builders to use modern methods which can see houses built far more quickly than by conventional techniques.
Mr Javid wants to see changes to planning powers so that properties can be built on land such as derelict land close to train stations, particularly in the congested South East, where properties are in big demand.
However, building more homes will still not have an impact on the large gap between wages and house prices, so more needs to be done to help those who are forced out of the market. Again, whilst this problem is particularly acute in and around London, rising prices are also forcing people to buy further afield from their place of work and endure longer commute times in other parts of the country too.
As well as new builds, the government could work with landlords to invest in more rental properties instead of increasing their tax burden. Landlords are more likely than private owners to buy properties which are in a poor state and need renovating, in areas which would not appeal to buyers, according to the chairman of the Residential Landlords’ Association, Alan Ward. The previous chancellor, George Osborne, always blamed landlords for buying properties which would otherwise be available to private homeowners. However, the London School of Economics disagrees and says that only a minority of house sales to private landlords involve bids from private home owners too.
Instead of deterring landlords through higher taxes and stamp duty, the government could look at dropping the new levy on stamp duty where a landlord is increasing the overall supply of housing to rent, by investing in a building which needs renovating or converting.