While I agree with the sentiment of your article, namely getting more people onto the housing ladder, I’m not sure how current properties could be made more affordable without either a massive crash in the market (as we have seen previously) or government intervention.
The former is market-led, albeit via external influences, and the latter is politically infeasible.
Assuming that we can’t directly influence the market itself, let me look at the second part and why it won’t happen. A boom in the housing market is generally seen, politically and economically as a ‘good thing’. Suppressing or reversing this isn’t going to win any votes...especially from existing homeowners who are already seeing little or no return from any other investments they may have been able to afford. In short, it would be political suicide and no right-minded government would consider it.
That’s why I believe in building more homes, that are affordable. Yes, these are likely to be a commute away from the centre of major towns, but that has always been the case. Kensington and Chelsea, for example, has always been heinously expensive and out of reach for all but the super-wealthy. That meant that the next tier of affluence moved as close as they could to Kensington and so on and so forth. Because of this, even somewhere like Tooting is now seen as desirable and expensive when, 10 or 15 years ago, it was undesirable and cheap (in relative terms).
There are ways to offset the inconvenience of ‘commuting from Shrewsbury’ – improving the public transport infrastructure being one – but longer commutes are going to be part of the quid pro quo deal of placing that foot on the housing ladder. Unfortunate, but a reality.
Let’s build houses that moderate earners can afford to buy, not penalise those that have already purchased a property.
Simon Kew is director of pensions at Jackal Advisory
