REPOST: Housing crisis not caused by lack of supply, says Tony Blair Institute

Food for thought perhaps in this article from ‘inside housing’

The UK’s housing crisis is not caused by a lack of supply and 300,000 new homes a year would not make a significant impact on house prices and rents, the Tony Blair Institute for Global Change has said.


The thinktank, which published a report today written for the UK Collaborative Centre for Housing Evidence (CaCHE), said meeting the government’s 300,000 target would only cut house prices by around 10% over 20 years and that the supply shortage story was a “red herring”.

The report was written by Ian Mulheirn, executive director and chief economist of Renewing at the Tony Blair Institute, for the CaCHE.

He said that low mortgage interest rates and global economics, including international demand to buy up property in London, are behind the 160% rise in real-terms house prices since 1996 – the year before Tony Blair’s 10-year stint as prime minister.

Increasing housing supply is likely to lead to a rise in the number of empty homes rather than boost levels of ownership, the report claimed.


READ MORE

70% of people say government not doing enough to tackle housing crisis, new research finds70% of people say government not doing enough to tackle housing crisis, new research finds
London needs a million new homes – but how do we get there?London needs a million new homes – but how do we get there?
London’s largest housing associations alter development plans amid ‘tough’ marketLondon’s largest housing associations alter development plans amid ‘tough’ market

Instead, it said politicians should focus on reversing the erosion of social housing stock, ending housing benefit cuts and improving wage growth for young people to tackle affordability problems in the rented sector.

And the institute warned that increasing homeownership without crashing the mortgage market will require “more fiscal intervention” to subsidise first-time buyers or reducing “financial incentives” for landlords.

Commenting on the report, Mr Mulheirn said: “Politicians of all stripes are unanimous in seeing an increase in supply as the solution to our housing crisis.

You might also be interest in these posts...

About the author 

James Newport

Essex County Councillor for Rayleigh North, Rochford District Councillor for Downhall & Rawreth and Rayleigh Town Councillor for Sweyne.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}
>