Govt needs a thorough long-term plan to solve housing crisis

Keith Barber

Keith Barber

Bottom of the pile is the ordinary owner occupier. No tax breaks on the cost of buying, just no capital gains tax when you sell.

There is an argument that these would not matter if house-builders were incentivised to provide enough homes to meet the demand, for first-time buyers or downsizers. Instead they are allowed to build up land banks with planning permission and thus ensuring they control the supply, which does not meet the demand, leading to ever higher prices and making it difficult for the younger generation to get on the housing ladder.

Even though on larger sites developers have to provide a certain amount of social or affordable housing, it is not enough to meet the demand faced by housing associations or the affordable market in general.

Everyone accepts that the planning laws need reforming, but making it easier for builders to get planning permission will not solve the housing shortage and probably only lead to even bigger land banks.

Government need to make the big house-builders use up their existing land banks before being granted any new permission. That does not mean the laws cannot be reformed to make it easier for small and medium-sized building companies, which find it difficult to compete in the current market, to get planning permission.

They traditionally develop smaller sites that are more sympathetic to local surroundings and at a lower price, thus forming a vital function in providing less expensive homes. 

Keith Barber is director business development at the Family Building Society