The Funding and Delivery of Housing – a re-set is required

We are not building enough new homes, and haven’t for decades.

If we go back to 1975, which wasn’t even the peak of house building in the UK, 85% of public money which went on housing was spent on the actual building of new homes and the supporting infrastructure.  Under current Government plans only £5 billion will be spent on the supply of new housing but £95 billion will go on housing benefit. 

So, we have moved from 85% of the expenditure going on new supply, to only 5%: a huge switch from subsidising building (which is a one-off expenditure), to subsidising rents (which is never-ending).

The solution to increasing the number of new homes in the UK is simple – we need to move back to subsidising building of homes and away from subsidising rents. I have been saying this for years but, of course, it doesn’t come down to what makes sense – it is all about politics and political obsessions and prejudices.

It is interesting to see, with The Labour Party’s recent announcement on ‘New-Towns’, that at last we may go back to delivering homes in a way that is relatively simple rather than tying ourselves up in knots with so called innovative funding and delivery ideas. The solutions are simple – but require a move away from the economic and political ‘consensus’ of the past 30 or so years. We need an economic reset, and Labour’s latest announcement on ‘New-Towns’ just might be the first move – at long last.

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