I was recently chatting to Clive Bull on LBC about the up and coming election and housing policies. He asked me an interesting question: are you looking forward to hearing about new government housing policies?
My answer surprised me a little, as normally I would just say yes and then go on to talk about existing and proposed policies and their pros and cons, but as I was thinking on my feet, what I actually said was ‘no’, what we really need is practical solutions, not policies.
And I do think this is key to sorting out housing problems. In some ways we make property far more complicated by adding politics into it. On the other hand, we need politicians to help the private and public sector deliver the homes that people need, but politicians need to change their approach.
Putting a roof over people’s heads is not complicated.
Demand for property isn’t ‘driven’ as it is in other sectors such as cars or toasters. People need a property. There are currently three ways of putting a roof over people’s heads:
Social housing is the area that has been hit hardest by ‘government policies’ since the late 80s when two million properties were sold off via Right to Buy (almost as many by Labour as the Conservatives).
The problem that needs to be solved in social housing is a simple one. According to Shelter there are around one million households that are eligible for a social home who haven’t got one. Many of these as a result are being subsidised to live in the PRS.
So, social housing, easy ‘policy’ but not so easy finding practical solutions, build one million social homes and the problem is solved.
The private rented sector is also not that complicated. While the one million social homes are being built, we need to house those on benefits, many of whom will be vulnerable, in the private sector, or shove them in B&Bs, which in my view is unforgiveable, especially for families.
Is there a practical solution to this? Yes, lets create one contract which has to be used by any landlord or agent letting to someone on benefits – this makes it easy for tenant support groups to look after and advise tenants. Let’s make sure these are let legally and safely by insisting on a Property MOT to receive any money from someone on benefits and then let’s have a proper deal of payment which doesn’t put social tenants at a disadvantage to private ones, eg clawbacks, four week payments, poor payment via universal credit. To help encourage renting to those on benefits, give landlords a tax advantage eg drop Section 24 or reduce CGT.
Next, let’s leave S21 in place and just extend the timeframe for advising tenants to leave. Two months if someone is asked to go, but if paid their rent on time and has always been a good tenant and neighbour, lets double this to four months. If they are in breach of their contract, then use Section 8 or the two months’ notice in S21 to ask them to leave.
And, despite some issues in London and other ‘expensive’ housing areas across the country, most analysis shows that average rental costs are ‘accepted’ as a third of people’s incomes. If we build more social homes and take people out of the PRS into the tenure they should be in, then we’d potentially have one million more homes for rent, taking a huge pressure off rental supply.
Owning a home is often described as ‘unaffordable’. Yet in many areas around the country, due to such low mortgage rates, as long as you can get the deposit together, for many, the costs of owning a home ‘once in’ is affordable. Unfortunately, because the industry, think tanks etc, often produce ‘scare mongering’ headlines about ‘average salaries’ versus ‘average earnings’ – personally I think this is the worst measure of ownership affordability that ever existed. Many people who can afford a home in their 20s, never bother to check it out as they are constantly told they ‘haven’t a chance’.
If we could do some proper, robust analysis of the number of homes available to buy, the costs incurred to buy (deposit and fees) and the on-going costs, versus say police and teachers’ salaries, in major towns/cities across the UK, we could then work out where the real affordability problems exist, and most importantly, where they don’t.
In areas where affordability is tough, we could look at innovative ways to help people who can afford the on-going costs of buying a home but are struggling with the deposit. Help to Buy, much maligned, does actually help this scenario, but there are other options such as paying a higher monthly fee rather than a lump sum at the start, or indeed people can make use of some of the existing family and friends’ mortgages.
When we know what and where the housing issues are, it’s not policies we need, it’s to ask the questions:
If we can adapt to this more ‘practical’ than ‘political’ approach, get the public and private sector, along with government to work together proactively rather than playing a ‘blame game’, we do have a chance of really solving our housing problems for the next generation.
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