The government’s recent white paper on the English housing market has been criticised for being too timid. This is partly due to the lack of movement on allowing more green belt development – a fair point, but it still looks like tinkering at the edges.
Also, the move to improve renting will come to nothing without imposing proper rent controls on the market, something very few seem prepared to do. The fact remains if (and it is a big if) you can save up enough for a deposit it is usually cheaper to pay a monthly mortgage than monthly rent. Not to mention the obvious fact that owning a property gives you a huge financial leg up and can be the basis of long-term financial stability.
So making the rental market slightly easier is, in fact, a huge admission of defeat by the government. From a political point of view, it is also a huge miscalculation and an abandonment of the middle ground of politics. The government has an open goal to shoot at – by doing more to provide affordable homes to younger people they could lock-in the next generation of solid Tory votes. The fact remains, those you own their property are more likely to vote Conservative. Simply because there is currently no real opposition should not mean the Tory party free-wheeling up to the next general election.
There does need to be a radical change in government policy, and we do mean radical.
1. A tax system that actively discourages residential property investment for the purpose of renting, whether carried out by individuals or companies. It should become financial suicide to own more than one home, (this includes second homes).
2. Homes that are purchased and not lived in should be similarly taxed. This is a particular problem in London but is growing elsewhere in the country. Overseas buyers who buy a property to rent out or just to use as a safe deposit box are not investing in this country. If they were to move here and live here full-time, they would be investing their personal futures in the UK – and that would be very welcome.
We have to stop looking at residential property as an investment it is bad for our economy. The money would be better used investing in companies and even the stock market. Money should be put to work not tied up in housing.
Also concentrating house ownership into fewer hands creates a greater economic imbalance in society, and that has a long-term detrimental effect. More people need to own their homes and think like homeowners. These same people will spend money renovating and furnishing their homes putting money back into the economy. This has to be a good thing.
We just have to get on with being bold and brave; sadly there seems to be a lack of political will to do the unthinkable. Fine words on the steps of number 10 need to be put into radical action. This must be the radical “right-to-buy” of our age.
It has political masterstroke written all over it.