One implication of your editorial on housing (1 December) is that greater supply would make housing more affordable. That would mean developers increasing supply to the point where they’d have to drop prices, and then keep building as prices continued to fall. They won’t do it.
Average prices have gone from 3.6 times average earnings to nine times over the last 25 years – through cheap borrowing, inherited property wealth snowballing on a rising market and, latterly, George Osborne’s help-to-buy scheme, which saddled buyers with more debt than the banks thought they could afford.
In this low-wage economy, the need is for social housing, and the new-build emphasis should be on that. But for ordinary families to have any chance of buying, the market needs puncturing by further structural change. Surcharging and requiring planning consent for the use of any dwelling other than as the main home, owned or rented, would be a start.
Negative equity? Of course there would be, though in the shorter term that’s coming anyway. But the help-to-buy element of the debt at least could eventually be written off, because with more social housing, the saving in annual housing benefit, now running at £23.4bn, would cover it.
Hidden in the small print of the autumn statement, the government announced that housing benefit for private sector tenants will be frozen for the third successive year. In social housing, rent can still be covered by universal credit or housing benefit, if the rules permit.
This of course exacerbates the private sector rents crisis that you report (Soaring rents making life ‘unaffordable’ for private UK tenants, research shows, 1 December). The government makes a decision on housing benefit based on data supplied every September by the Valuation Office Agency (VOA). The process is opaque. Nobody outside the government knows how much the VOA thinks rents have risen. Its data won’t be published until the end of January.
In Cornwall, the council has said that the private rental market has all but dried up. Emergency accommodation for the homeless is often offered in a hotel, sometimes miles away. Already the maximum housing benefit here can be £50 a month less than the VOA-recommended figure. The shortfall will be even greater now.
While there are undoubtedly some social landlords who are providing a poor service to their tenants, one can’t help thinking that Michael Gove’s high-profile interventions in the last fortnight are designed to deflect attention from his inactivity regarding the dire state of the private rented sector. Moya Lothian-McLean’s article highlights the almost nonexistent protection from very poor quality housing, rent gouging and no-fault evictions in the private rented sector (Facing eviction, I’ve learned that relying on ‘good landlords’ is a feudal throwback, 2 December).
It’s all very well the government promising an end to the latter practice, but it’s more than three years since the original commitment was given. How cynical also that the levelling up spokesperson’s response was to pass the buck to councils, saying that it was their responsibility to ensure families are not homeless. Let’s have the same level of intervention in the private market as Gove has recently promised for social housing.
Much Wenlock, Shropshire