Lyons review: housing policy needs long-term commitment
Published: 18 February 2014 | Author: Bernard Clarke
The UK needs a housing policy that commands strong cross-party support and is sustainable beyond one parliament if it is to succeed in addressing a chronic long-term shortage of accommodation, according to our response to the Lyons review, submitted earlier this month. We argue that housing must not become a political football if we are to achieve the long-term goal of building 200,000 homes a year.
Our response notes that the review being carried out by Sir Michael Lyons for the Labour Party raises no specific questions about the role of mortgage finance. We assume – and agree – that this reflects the view that mortgage finance is not currently considered to be a barrier to housing supply.
Housing market sentiment has changed dramatically in the last year, and total lending of £176 billion in 2013 was around one-fifth higher than the preceding 12 months. We expect lending to grow to more than £200 billion by 2015, indicating that mortgage finance should not be a barrier to the drive to increase housing supply in the short to medium term.
Nor is demand for owner-occupation a constraint. Consumer research conducted last year on our behalf by YouGov re-affirmed the deep-seated desire for home-ownership in the UK, with 79% of British adults wanting to be owner-occupiers in 10 years’ time. However, we support efforts to bolster the building of new homes, irrespective of tenure.
We also believe that there is a strong case for considering greater public provision of housing. Over the last three decades, there has been just one year (1988) in which more than 200,000 new homes were built in England. By contrast, in the 1950s, 1960s and 1970s – when the public sector had a bigger role in house-building – annual house-building averaged 260,000 properties, and there were just three years in which fewer than 200,000 homes were completed.
We also urge the Lyons review not to take too narrow a view of fulfilling housing need. There may be better ways of using the existing housing stock; and we should not forget that there is considerable wealth tied up in existing property. Equity release is not a panacea, but it has a role in allowing people to access their housing wealth and potentially in supporting themselves in old age.
In some ways, Labour’s plans to build 200,000 homes annually by 2020 are not ambitious enough. The target implies that supply will not keep up with need for at least the next five years – let alone make any impact on the cumulative shortfall in housing that has built up over recent years.
We believe, however that it is important not to focus exclusively on targets. It is unlikely that we can simply build our way out of the current housing crisis. The quality of homes that we construct and the infrastructure to support them are also key policy considerations.