The British government’s eagerly anticipated White Paper on the housing market was branded a “white flag” on Tuesday as it failed to come up with convincing proposals to tackle the UK’s chronic housing shortage.
"Is that it?" sneered shadow housing secretary John Healey after communities minister Sajid Javid delivered the proposals to an underwhelmed House of Commons.
The White Paper, the first for the housing sector in almost a decade, was “feeble beyond belief”, Healey said, and merely served to confirm that the Tories “have given up on home ownership and have no plan to fix the country’s housing crisis”.
There was at least one admirable aspect of the 104-page report: it didn’t underplay the scale of the crisis, freely admitting that the housing market is “broken”.
In a foreword, prime minister Theresa May wrote: "Our broken housing market is one of the greatest barriers to progress." She also said – as if those desperate to get on the housing ladder needed reminding – that the average house in the UK today costs almost eight times average earnings.
And for those for whom owning a home remains a distant dream, soaring rents are eating up an ever-higher proportion of their earnings, sometimes as much as half their take-home pay.
So what proposals has the government come up with to fix Britain’s broken housing market?
With at least 250,000 new homes needed each year, compared with the 190,000 built in 2016, local councils will be given powers to force builders to not sit on land but to press ahead with building. If they have not started building within two years of planning permission being granted, it will lapse.
Rented sector
There will be support for housing associations and local authorities, as well as smaller building firms. Councils must also produce regular, and realistic, projections for local housing needs.
There will be extra protection for those in the rented sector. The proposed ban on letting agency fees is also to go ahead, although no timescale was provided.
It’s more what the White Paper did not include that was a cause for concern. There was no mention of the government’s target of building a million new homes by 2020, a target that now looks impossible to meet.
Javid also shied away from any radical proposals on the sacred cow of greenbelt land – which is protected in law – saying that while greenbelt building would be possible with the correct approvals, it was not a priority.
“There’s a lot of land out there that is not greenbelt and it’s right that we should continue to prioritise that,” he said. Instead, brownfield land and increased density housing would be targeted.
His refusal to relax the rules on greenbelt land – not all of which is made up of rolling fields, ancient woodland and meadows – disappointed many in the industry.
There was also disappointment that there was to be no overhaul of the stamp duty regime, a major deterrent not only to first-time buyers but also to older homeowners wishing to move into smaller properties.
‘Last-time buyers’
There was a reference in the White Paper to encouraging older people to downsize, thus freeing up more family homes, but no detail was provided on how this might be achieved, given the acute lack of retirement housing in the UK. Instead, it said options for this were being “explored”.
Millions of these “last-time buyers” are rattling around in four- or five-bedroom houses when they would far rather cash in on their largest asset and move to a more manageable one- or two-bedroom property.
It is estimated that there are more than five million underoccupied homes in the UK, with some 3.3 million last-time buyers looking to downsize to smaller homes. That’s a total of 7.7 million empty spare bedrooms, representing £820 billion of housing wealth, a figure that’s forecast to rise to £1.2 trillion by 2020.
A typical last-time buyer lives in a four-bed house but would prefer a two-bed property, and while almost a third have considered downsizing in the past five years, just 7 per cent have done so.
While the White Paper was a step in the right direction, it will be remembered more as a missed opportunity, according to the Adam Smith Institute's Ben Southwood.
“Sajid Javid seems to understand Britain’s housing problems in a way that previous communities secretaries have not. However, many of the bold ideas floated in the past few months have been dropped, presumably because not all his colleagues recognise the scale of the problem,” he said.
As Southwood pointed out: “Knowing the problems is not the same as solving them.”
Fiona Walsh is business editor of theguardian.com
