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19 March 2015

We know we have a housing crisis. Here’s what we can do about it

Britain's housing market is in chaos. Here's how to fix it.

By Keith Taylor Keith Taylor

If anyone needed more evidence of why Margaret Thatcher’s period as Prime Minister was so bad for this country, they need look no further than today’s social housing waiting list. The size of the list, which has reached 1.8 million people, (and with most people having little hope of being housed) can be directly linked to the introduction of ‘Right to Buy’, via the Housing Act 1980.

As part of research for my new report, released today, Everyone Knows We Have A Housing Crisis: Let’s Do Somethnig About It one constituent told me she’s been waiting on the list for over 24 years!

Since the coalition government was formed in 2010, the housing crisis has clearly worsened. Under the auspices of the Localism Act, councils have been given the freedom to abandon their social duty to house those in greatest need. Another flagship policy, the ‘bedroom tax’, probably one of the most damaging and divisive policies ever introduced – seeks to free up larger properties by surcharging tenants for unused rooms, irrespective of whether smaller properties are available locally.

People have had enough of living with the fear of not knowing how they will pay next month’s rent, and are exhausted by politicians who fail to take actions bold enough to fix the crisis.

We now need a fundamental change in the way we see housing and its purpose. For this change to occur, we must move away from treating houses purely as financial assets to be shuffled around for maximum gain and instead ensure that we provide decent and affordable homes that meet people’s needs.

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My new report demonstrates how housing has become unsustainably expensive, and how fresh political will and innovative mechanisms are needed to make housing work for people again.

When Ed Miliband launched his party’s rent-control policy last year, the Tory’s accused him of bringing in ‘Venezuelan-style’rent controls, in an attack aimed at making the Labour party look overtly socialist. Unfortunately, this couldn’t be further from the truth. Labour’s timid rent control policy would put an upper limit on rent rises based on average market rates. This does nothing to help those people who are already struggling to pay excessive rent in the private rental sector. If salaries and benefits rise as predicted, rents need to stay still or even fall as they are out of balance with everything else.

What we need to do instead is explore the possibility of setting up a ‘Living Rent Commission’ to look at implementing a genuinely affordable rent control policy dependent upon local median incomes, not market rates. The fact that “affordability” is now defined as a function of market rate, set at up to 80% in some places – rather than local income, has in effect “rendered the word affordable meaningless.”

The Green Party seek to increase the amount of social rented homes (council housing) as the best way of ensuring an availability of affordable housing. Greens are committed to building 500,000 new social rented homes by 2020.

We’re also calling for a ‘Right to Rent’ policy which would allow homeowners who are unable to meet their mortgage payments and are under threat of repossession to have the right to transfer ownership to the council, in exchange for the right to remain in the home and pay rent as council tenants.

Whilst I support a mansion tax, there are better and bolder ways to introduce fairer housing taxation schemes to address the housing crisis. One way would be to reform council tax to ensure that as property values get progressively higher, the tax paid on them also increases. Another option would be the implementation of a land value tax.

Under the government’s Empty Dwelling Management Orders, only 17 empty properties were brought back into use last year; this suggests that more powers should be allocated to local authorities in this area too. By criminalising squatters who it’s clear do more good than harm the government has only made the problem of empty homes worse.

The solutions to the UK housing crisis already exist. What we currently lack is the necessary political will to make the radical but necessary changes that are urgently needed.