The Future of Housing in the UK

1. The Future of Housing in the UK Three solutions for the next PM? Christine Whitehead London School of Economics Social Markets Foundation London, July 4th 2019

2. The Provision of Additional Housing • Competitive bidding for an unrealistic number of new homes, based on near nonsense demographic data; • Target simply there to put pressure on the planning system to produce more – but is this pressure generating homes where they are needed and of an acceptable quality? • Any house/anywhere is not a sensible policy –many different housing markets and types of need across the country. • Permitted development and poor standards simply building up problems for the future.

3. The Standards of What is Provided • Increased output has been accompanied with increasing evidence of poor quality building in some contexts; • Higher quality housing can be achieved without significant cost increases but little incentive to do so; • In particular, energy efficiency in new buildings is not being improved as quickly as it could be; • Leasehold reform necessary both for houses and flats; • Modern methods of construction not a silver bullet but could certainly help to ensure less snagging and better quality.

4. New Provision and Affordability • Belief that building more at levels suggested will reduce house prices; • But economic evidence is that would need far higher levels of output in order to make a significant direct impression; • Housing demand is not just about demographics but about incomes. What is necessary in the long run is to ensure that the stock of housing grows at least in line with those incomes if affordability is to improve; • This means greater supply responsiveness to price increases – and a less volatile market; • But worsening distribution of income means that the better off older generation can outbid younger households – so first time buyers have been and may continue to lose out.

5. The Changing Housing Stock • Massive shift in tenure of the existing stock since the turn of the century – from both owner-occupation and social rented housing to private renting; • Not predicted; across the country (London only different in that started at higher levels); • Result is that private renting has become more a mainstream tenure – but doe not have the attributes to provide a good longer term home especially for family households; • Also generates large increases in the welfare bill – which has been partly controlled by constraints on LHA – which means that households on benefit often cannot afford the other necessities of life.

6. Three Immediate Recommendations • Hardly solutions BUT would make a (relatively) immediate difference to many peoples live • Work to implement the Letwin recommendations (or modifications thereof) on diversifying provision on large sites and on developing a modern form of development corporation – and sort the relationship between infrastructure provision and housing delivery. • Reassess permitted development – to ensure adequate standards and a basic contribution to community (as well as effectively supporting high street redevelopment ). • Reverse 4 year freeze on Local Housing Allowance and move quickly on consultation on S21 no fault eviction.