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.