Building more and more houses & flats is not the answer!

Build, build, build is not the answer to the housing crisis.....
Local people most in need of a home can't afford the market price of housing, no matter how many houses are built. Lack of mortgage finance availability for first-time buyers and the weakness of this group’s income growth has been mainly responsible for the slump in the home ownership rate. Building new homes doesn't necessarily mean homes for those who need them. Given the huge inequalities in wealth, the market is more likely to furnish more second homes for some UK residents, and investment opportunities for wealthy foreigners looking for a safe haven for their money, than to provide homes for people in need. To make housing more affordable, new housing developments would have to reduce house prices in their local area. But a recent study by the LSE which looked at eight large new developments built in the last five years, found that prices in the local area did not fall after completion, and in some cases they went up.* 

And for those who can afford to buy the exemption from capital gains tax for main residences, inheritance tax breaks, a grossly unfair and regressive banding of council tax: all create powerful incentives to pour your money into a bigger house than you need, and then hold onto it. These incentives also drive up prices, by ensuring that all the gain accrues to the owner. The results include unaffordability, unsustainable levels of debt and speculative bubbles.

Before anyone points out developers have to provide a % of affordable homes, at least 50% of housing schemes failed to meet local affordable housing targets in Bristol, Bradford, Cardiff, Manchester and Sheffield**

Developers have a massive get out clause permitting them to carry out financial viability assessments for their proposed developments, which often conclude that meeting the affordable housing targets set by local authorities would reduce their profits to a point that the scheme would be worth their while. However those assessments are kept confidential, with even Councillors unable to see them. In order to make sure schemes goes ahead, the local authorities typically reduce their targets or accept payment from the developer in lieu of the affordable homes. That money is supposed to be invested into social and community projects, or the council’s own affordable housing schemes.

Councils are tempted into pressing for more housing as section 106 has become a primary means of funding essential public services, public parks, health centres to highways, schools to play areas. The bigger the scheme, the fatter the bounty, leading to a situation not far from legalised bribery – or extortion, depending on which side of the bargain you are on. Vastly inflated density and a few extra storeys on a tower can be politically justified as being in the public interest, if it means a handful of trees will be planted on the street.