How to solve the housing crisis

Britain has a housing problem, right? Rents have spiralled; high prices have put homes beyond the reach of young families, especially in and around London; first-time homeowners need a massive deposit to obtain a mortgage. At root, supply and demand are out of kilter. We have simply not been building enough new homes to keep pace with population growth and changing family structures.

The trouble is, some of the most obvious solutions are unpopular, according to YouGov’s latest survey for Prospect. Relax the planning laws to allow more homes to be built? Only 36 per cent back this. Use tax incentives to encourage older homeowners to downsize, or families to move away from the southeast? Most voters say no thank you. Raise taxes to provide money for new private or social housing? Big majorities oppose the idea.

There is support for making immigrant families wait longer for social housing, and for a “bedroom tax”—cutting housing benefit to families with more bedrooms than they need; but whether or not these are good ideas, they won’t correct the larger imbalance.

What’s more, just suppose supply rose to match demand and this caused the house price bubble to burst. By three-to-two, voters would be sorry if prices fell sharply. And fear of this is strongest among older people—the kind who vote in greatest numbers at election time. Tackling Britain’s housing shortage in years to come is not just about curing a huge social headache—it’s also about preventing a potentially violent political migraine. For once, a gradual long-term strategy may not just be economically sensible; it may be the only viable way forward politically.



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