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THREAD to roughly set out my thinking on housing.
The UK housing market is skewed by a lack of supply vs demand causing the housing crisis. Building houses will address this but the market is confounded by the dual demand & competition of owner-occupiers vs landlords. 1/15
The UK housing market is skewed by a lack of supply vs demand causing the housing crisis. Building houses will address this but the market is confounded by the dual demand & competition of owner-occupiers vs landlords. 1/15
I live in Newham which is one of the places in England worst affected by the housing crisis. The median price of a flat is £415,000, about 17 times the median salary of about £24,000. Homelessness is over 9% affecting almost 15,000 people. That’s the highest in England. 2/15
Newham has 34,000 privately rented dwellings. Over a third of the borough’s total housing stock is owned by landlords. The rent they charge for a 2 bed here is about £1,500 a month or 75% of the average salary before tax. 3/15
79% of private renters surveyed nationally would rather own their property. We can assume the same applies here. Why don’t they? Because they can’t afford to.
They can’t afford to because supply is restricted more people want to live here than there are houses for sale. 4/15
They can’t afford to because supply is restricted more people want to live here than there are houses for sale. 4/15
By 2025 we expect there to be more than 7,000 more households living in Newham. Combined with the homeless population and the households that are forced into private rent, we would need another 40,000 homes by 2025.
In 2017/18 just 1,846 homes were built in the borough 5/15
In 2017/18 just 1,846 homes were built in the borough 5/15
To accommodate those 40,000 households we would need to increase house building here by 4.3 times. In the same period nationally we started 165,000 new homes so an equivant number would be over 700,000 new homes a year needed nationally to normalise the housing market. 6/15
Current UK targets are to build 300k homes a year but why can’t we achieve even that? The reasons are complex including a workforce shortage of some 370,000 people nationally. This will only get worse after Brexit. There is no government policy to address this shortfall. 7/15
The supply is further hampered by market forces. Simply put the more houses you build the higher the supply and the lower the profit for house builders. Eventually house building becomes loss-making unless land prices are reduced but land prices are kept high by investors. 8/15
So yes we could and should take the steps and years necessary needed to train labour and boost industry capacity. But this is a hard long term project and still has problems.
So let’s also unlock the properties already in existence and add them back into the market now. 9/15
So let’s also unlock the properties already in existence and add them back into the market now. 9/15
Possible solutions: Up to 79% of rental properties would be surplus to requirements in a normalised housing market. These properties need to go back into curculation...
Set up zones where multiple home ownership is banned or heavily restricted. Heavily tax by-to-let homes. 10/15
Set up zones where multiple home ownership is banned or heavily restricted. Heavily tax by-to-let homes. 10/15
Many communities are impacted by 2nd or holiday homes. Such communities should be given the power to impose bans on 2nd homes. Your holiday home is infinitely less important than... pretty much anything. 11/15
Land and property prices are kept high by investors buying off-plan, particularly from overseas. This should be banned. Houses are for humans to live in and should not be just opportunities for profit. 12/15
Treat land as a national resource. We treat land as a commodity which leads to investor speculation and concentration of wealth and power. This is incompatible with the spacial nature of human existence and accommodation.
The sale and ownership of land should be regulated. 13/15
The sale and ownership of land should be regulated. 13/15
More long-term vacant properties exist in the uk than we can build in a single year. These must go back on the market. We need a requirement to let or sell homes. non-compliance should lead to escalating penalties and eventual compulsory purchase or worse. 14/15
Invest in education. To scale up house building we need to recruit huge numbers of skilled workers. This needs a fundamental change in our culture of education and training. We need technical courses taught in schools alongside the academic. 15/15
Bonus Tweet: government policy to redistribute economic activity better around the country to avoid huge spikes of local demand especially in London and the south east. This is essential.
