Britain’s housing crisis, and how the state is causing it.

The Hotel of Mum & Dad could be your perfect holiday destination this decade. Good food, an in-house laundry service, broadly friendly staff, and all at a very affordable rate, if BBC Three is to be believed…

But while this may not always be the case, figures recently released by the Office of National Statistics show that more than 3.3 million persons age 20-34 are choosing to remain living at home with their parents. That’s 26% of the entire age group. And it’s on the rise.

The figures demonstrate a long-term and, until relatively recently, an unmentioned problem developing across the country today: namely, a lack of genuinely affordable housing for our young people.

But the government’s flagship Help to Buy scheme, aimed at addressing the issue, appears to be meeting only with mixed success. While 750 homes have been purchased and 6,000 offers have been made since the scheme was launched last year, average house prices rose 8.4% in 2013 according to a survey by Nationwide, raising fears of a pre-2008 US-style housing bubble amongst commentators. Others have suggested that scheme will likely benefit wealthy investors, but not those who are keen to step onto the property ladder. The government has dismissed the criticism, claiming that 80% of applicants are first-time buyers, and that safeguards exist to guard against any bubbles. Draw your own conclusions.

Labour have hit back, arguing that the government should instead focus on housing construction, and that any future Labour government would commit to the construction of 200,000 new homes per year. It must be said, attempting to increase supply as a means to deflate prices does seem a rather reasonable Labour policy. Except that they’re willing to engage in widespread land seizures if necessary, a policy rather popular with a certain Comrade IV Stalin. He also liked price fixing.

It seems that ultimately, the crux of the problem hasn’t quite been found yet (or rather has been, but is being deliberately ignored) by the major parties. For ultimately, the problem lies with the very strict planning regulations which govern housing developers, and which the Localism Act appears to have failed to relax.

These regulations, which are readily asphyxiating our housing market, are in the direct interests of home owners. Land suitable for building has become extremely difficult for planners to purchase, and that which is available is often so high priced that developers will only construct high-value units upon it. The result: the values of currently owned properties remain high, directly advantaging those who own their own home at the expense of those who don’t.

Well-organised home owners, aware of their potentially high monetary losses as a result of developments, organise and lobby local governments, and coupled with electoral calculus, politicians are keen to block developments in order to retain their seats.

Ideally, a system is needed where development rights reside with small local communities, rather than with councils, who can auction such rights off, profiting from development, and thus be incentivised to encourage development. But in the short-term, serious deregulation of the market is desperately needed, and stimulating demand, nor the seizure of land will solve the problem.

But until we see such liberalisation, we should expect to see more Hotels of Mum & Dad springing up across the country.

Because, yet again, government is the problem, not the solution.

Tom Pike


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