The housing crisis for first time buyers

    Progressive European Party

In response to a tweet by Tom Harwood

Tom Harwood

@tomhfh

The only people around my age I know who have been able to buy a house are those who have not had to pay rent. Stuck forking out a third to half your income on rent? You're stuffed. No other generation had to put up with this.

The Progressive Party has a solution for the housing crisis that would provide more properties for first time buyers and end the council waiting lists without costing taxpayers any money. I will cut and paste our housing policy below.

The problems come about because banks don’t lend money for mortgages from their cash reserves. They generate the money electronically. This creates a lot of free money and therefore artificially inflates house prices. 

Building developers are mostly interested in building three bedroom houses because that is where most of their profits lie. Whereas the trend in society is for more people living on their own. What is needed are more one bedroom and studio flats which would also help first time buyers get on the housing ladder. 

Local authorities have been restricted by the government in how much new housing they can build. And when people are paying rent their landlord most probably has a mortgage on the property themselves so they have to charge rent higher than the costs in order to make a profit. Add all these things together and you have the perfect storm for high rents and house prices. 

The Progressive European Party 

New Housing Initiatives

One of the most pressing issues of our time is the inadequate provision of social housing. It is an area of policy that has been neglected by successive governments for many decades.

The results of this neglect are all too obvious in both urban and rural areas. The demand for housing far outstrips the supply and secure, adequate and affordable housing is now a distant dream for the majority of families and individuals.

The Progressive European Party intends to address this problem from its very roots.

Central government does not, at present, allow local government to borrow against the value of their housing stock in order to raise the finance necessary to build new housing. In addition local government is not allowed to use the money it generates from the right to buy scheme to build new housing. If such borrowing and relocation of funds were to be allowed, new social housing could be built at no cost to the taxpayer. If, furthermore, 50% per cent of these new builds were sold on the private market, the revenue from these sales could be put towards the cost of each project. Such a scheme would work perfectly in predominantly urban areas. In such cases the high building costs would be offset by high house prices. Thus the revenues from properties sold would be more than enough to cover the costs of the entire project. In other words, each well-managed project would provide new social housing completely free of cost. In some areas of the country, the whole cost of building might not be fully recoverable from private sales. In such instances, however, it would still be possible to build social housing at approximately half the cost of solely social estates. The savings generated would thus be enormous. The effect of this would be that the chronic housing shortages in the private sector would at last be alleviated. Social housing would at last be available to all who need it.

The total cost of building could not be expected to be reimbursed from the sales in every part of the UK. Nevertheless, each project would still ultimately cost nothing. For any remaining unsold properties would be rented. This rental revenue would easily cover interest payments on any outstanding loans. These housing initiatives will also provide an opportunity to upgrade building regulations to require high standards of safe, fire-proof insulation for all new builds. Catastrophes of the type typified by the Grenfell Tower disaster would be averted and winter heating costs would simultaneously be minimised. New flats, for instance, would have only one outside wall. Thus insulation cost per unit would not be significantly greater. New building regulations would also make solar panels and, where appropriate, mounted wind-turbines mandatory. The electricity generated could either be used directly for heating or, at times of surplus, be sold into the National Grid. Technologies such as storage radiators and efficient insulation would provide efficient and cheap or cost-free heating. Fuel poverty for occupants would become a thing of the past. Providing suitable housing for all would save local authorities millions of pounds. Currently local authorities spend large sums on bed and breakfast accommodation for the homeless. By the same token, at present, when a family becomes homeless, children have to be taken into care. This is inordinately expensive. Central government, moreover, currently spends £25 billion on the UK's housing benefit bill. To sum up, the need for local authorities to build low-cost, inferior housing would be obviated. Because about half of new homes would be sold on the open market they would need to be of a high standard to attract buyers. Finally, therefore, the plight of first time buyers and council waiting lists would, in due course, be ended. Good quality homes would be available for everyone at no cost to the taxpayer.