Lord John Shipley writes…Five foundations for the Housing White Paper

The lack of affordable housing in the UK is at crisis point. On average, house prices are now almost seven times people’s incomes and over 1.6 million people are on housing waiting lists in the UK, including 124 000 homeless children. This means that the Government’s White Paper on housing has been highly anticipated. But it needs to be extraordinarily ambitious to tackle the severity of the housing crisis.

It is too late then to simply paper over the cracks. We need a radical, far-reaching and comprehensive approach to housing. That is why the Liberal Democrats are calling for a complete overhaul of the housing system, with an emphasis on five key solutions.

Creating more affordable homes for rent

20% of the population lives in private rented accommodation. And yet, private sector rents have become unacceptably high in many parts of Britain, most notably in London. Many renters are now paying more than half their disposable income in rent.

That is why we have been calling for government investment in a new generation of quality homes for rent that are affordable for those on low and middle incomes. This means increasing the access to finance for councils and housing associations and reversing the sell-off of higher value homes.

Because the need for affordable homes for rent is now so severe, this should be accompanied by an increase in the use of offsite construction, or prefabs, to speed up the house-building process.

However, Brexit has complicated this picture. That’s because building costs will increase significantly due to the rising cost of imported materials and because it will be harder to recruit vital workers from Europe who are needed in some parts of the UK and to create the certainty necessary for investment.

Developing a Housing Investment Bank

The housing sector is crying out for capital. A Housing Investment Bank would tackle this problem on three fronts. First, it would create the much-needed investor scale and confidence to draw in private capital. Second, it would provide long-term public capital for major new developments. Third, it would provide better access to finance for small and medium sized construction businesses.

Much like the British Business Bank or the Green Investment Bank, a Housing Investment Bank will create a forward-looking, long-term approach to solving the housing crisis and investing in the future.

Bringing empty homes back to use

The number of empty homes in the UK is a scandal. This is especially true at a time when demand is so outstripping supply, and house prices and rents are unaffordable for so many.

That is why the Liberal Democrats would enable local authorities to attach planning conditions to new developments to ensure homes are occupied. This would tackle the growth of ‘buy to leave empty’ investments from overseas in property hotspots like London.

After a new home has been empty for a long period, we would allow councils to compulsory purchase them from the owners so they can be used as homes again.

Introducing new garden cities

I welcome the government go-ahead for new garden villages, the locally led new communities that give access to green space and sustainable development as well as planned infrastructure.

However, the Government’s commitment does not go far enough. We have long been calling for at least ten new Garden Cities to provide tens of thousands of high-quality new homes with gardens, transport links and schools.

Backing Supported Housing

Supported housing for older people and vulnerable adults is a crucial resource for many people, allowing its residents to live independently where they previously could not. People living in supported housing face a number of challenges, including fleeing domestic violence, addiction, ex-offending and homelessness. That is why the Liberal Democrats are calling on the Government to support those relying on supported housing, including by developing the use of Housing First and other innovative solutions. The supported housing grant must be protected.

Access to housing – whether this is supported housing, private rented housing or home ownership – is fundamental to our liberties, opportunities and hopes for the future. The White Paper comes at a crucial time and must deliver a radical plan. Anything less will only extend this crisis for the next generation.

* John Shipley has been a Lib Dem Peer since 2010 and is a former Leader of Newcastle City Council.

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  • One of the key reason housing associations are cheaper than private landlords is quite simply because they pay zilch in tax. So even the cheapest housing associations (and rare in number) where they are 40% less than the market rent factor in the 20p/40p/45p/. So with that exemption they are not so charitable. Dont get wrong its nice for those who don;t have to find the extra but lets be realistic as to why they can charge less. For those renting privately and with someone who has a morgage who will be forced to raise rents 25-30% in the coming years because of the interest relief to get the same is not going to help, I would add interest relief is allowable expense in all eu countries bar finland from what I have heard so reinstating that may be wise.

  • grahame lamb 7th Feb '17 - 8:14am

    I have read Lord John Shipley’s article with interest. My understanding is that the Government will today publish a White Paper on Housing. There is clearly a debate to be had – and I look forward to it.

  • Tony Dawson 7th Feb '17 - 8:17am

    The amazing thing is that the government’s white paper is not absolutely appalling. The non-amazing thing is that their conduct over housing previously, which brought them to the sudden realisation that all is not well, WAS appalling.

  • Cllr Ron Tindall 7th Feb '17 - 8:55am

    Decent housing should be a priority for any government, and contributes to good health. Housing shortages contribute to that anti-foreigner feeling. Until 1989, and the commencement of the Thatcher years, this country built 300, 000 housing units a year. We need to take the shackles off local authorities, allow them to borrow to build quality social housing, and allow pension funds to lend to local authorities at an assured long-term interest rate, thus helping to fill that black hole. Oh, and not let us then sell off those units after they are built.

  • Matt Wardman 7th Feb '17 - 4:08pm

    I think Cllr Ron needs to read up on the dates of Mrs Thatcher, or perhaps get a proof-reading keyboard or a secretary 🙂 .

    UK Housing Output was only above 300k from about 1962 to 1972.

  • Subscribing only to the tools of supply and demand will have to be tempered in order not to create a crisis of negative equity of existing home owners. Success will cause as many problems as failure. The hope is that it will take so much time to catch up that the market has time to adjust without too much distress. Unfortunately low wage inflation causes those time scales to be longer than in the past.
    The key to fixing the market is to get back to a target price earning ration of roughly 3.5 – 4 time multiple. Currently this is running at 8.00 times in parts of the country. The rental market is similarly overheated with a ratio of 40% – 50% of earning as opposed to what it should be at around 25%. This locking up of spending in keeping a roof over the head is ultimately bad for the economy in suppressing consumer spending. In the past these multiples have had a natural route to recovery through inflation. When p/e got to around 5.00 it could be adjusted through wage inflation without stressing the debt.
    Since the days of 0 – 2% inflation this natural method of adjustment has gone and low interest rates have enabled multiples to rise. It will take decades to fix the current problems in the housing market but what is important is that the methods put in place have the capacity for long term control of the market so that this key element of the economy and people’s lives can be regulated. There are ways and means but I doubt politicians will be brave enough to take them (unless you are in Scotland). Start with land reform.

  • Ruth Bright 10th Feb '17 - 1:12pm

    Supported housing – wonderful. As long as said supported housing does not rely on all the support workers, sheltered housing wardens etc being paid a pittance to provide the support!

  • Roger Jenking 20th Feb '17 - 1:42pm

    This fails to deal with leasehold reform on which the LDs seem not to have a policy. Credit to Cllr Bob Smtherman of Worthing who tried to breech the self serving LEASE Exec and Baroness Hammer who has joined the all party group on the subject. When will a radical policy, preferably involving leasehold abolition, be formulated?

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