Earnings have risen too slowly
"The Housing White Paper pinpoints the main problem – that average house prices have risen to eight times earnings, this ratio doubling in some areas since 1997 – then addresses the wrong part of the ratio in order to solve it. The problem is that earnings have risen too slowly, not that house prices have risen too fast.
"Increasingly restricted access to home-loans, due to more stringent credit checks and higher down payment demands, result directly from the tougher financial regulation that had to be imposed after 2008 to prevent a repeat of the banking crisis. Previous over-generous lending artificially ratcheted-up house prices – but it was literally a ratchet, and the only solution is to create conditions where earnings rise faster.
"The higher rate of house building the White Paper proposes will not, and is intended to, reduce house prices to make them more affordable. After the 2008 financial crisis it was essential to restore rapid house price growth, so as to restore banks and heavily-borrowed households to solvency. The government deliberately did this by shoring-up demand (through help-to-buy, funding-for-lending, etc.), while allowing supply to languish. Home-owners – still a clear majority – would be financially damaged by a fall in prices, and this would impose additional welfare and pension costs on government."
"In breaking with the Conservatives’ longstanding commitment to wider home ownership, the White Paper assumes an unrealistic separation between levels of rent and of house prices. In the private sector they move together.
The only way to make lower rents widely available without a general fall in house prices is for local authorities to build more, and offer subsidised rents.
"Capping rents set by private sector landlords or housing associations, or imposing more obligations on them, will just lower the availability of rental property. Curbing housing benefit will just eliminate low-income tenants from the private sector, but local authorities are still not being given resources to build more homes for affordable rent.
Pressure to build fast brings problems
"The White Paper proposes steps to build more homes, more quickly, without explaining where the additional labour will come from. It assumes a surplus of builders, architects etc., when in fact, there is an emerging shortage which Brexit will make worse.
"The proposal to ‘build homes faster’ invites a worsening in the quality of newly-built homes, made worse by the frequent ineffectiveness of guarantees given on them.
Commuting is being killed-off
"The repeated admission that more homes are needed ‘where people want to live’ is an admission that commuting is being killed-off by rising public transport costs. Under present franchising arrangements, proposed new rail lines will not – even in the long term – enable people to work in locations where housing is unaffordable by travelling from areas where they are affordable.
"The proposals for ‘Making better use of land for housing by encouraging higher densities… and by reviewing space standards’ are appropriate for some urban areas, but will widen the gap between the lords in their manors and the tenants in their rabbit-hutches."
Many good proposals
"There are many good and constructive proposals in the Housing White Paper, including attacking the ‘land bankers’ by forcing them to use planning permissions; giving more assistance to local authorities to provide cheap rents and lower-income households to afford them; promoting productivity, skills and small-housebuilder involvement in the construction industry; and prioritising brownfield development and empty-home rehabilitation so that the Green Belt is built-on only in ‘exceptional circumstances’."