Help to Buy is not the answer to building enough homes

Help to Buy is this government’s biggest intervention to date in the housing market and ministers often portray it as a major part of their answer to the housing shortage. However our analysis shows that this approach cannot deliver enough homes to meet need. The only way it could is if the average price of a home in England reached an astonishing and implausible £9 million.

Let me explain.

The current – and orthodox – thinking is that the supply … Read more

Talking about bubbles misses the point

Not a day goes by without someone, somewhere, making their case for why we are in a new house price bubble – and someone else insisting that we’re not.

The argument about what actually constitutes a bubble is both pointless and annoying, as it is completely detached from people’s lives and experiences. But even worse is the constant comparison of today’s house prices to ‘the peak’. The ‘bubble-believers’ point to house price indices to show that house prices today are … Read more

Geography makes the housing crisis more complex

Unfortunately for those of us who try to come up with neat policy solutions to our housing problems, there isn’t just one housing market. That means policies need to reflect local variation.

Ever-increasing house prices are a result of a range of complex and interconnected issues: the amount of land brought forward for development; investment and speculation on land and housing; employment and wage levels; credit availability; interest rates and consumer confidence, to name but a few. Policies that recognise … Read more

The question should now be about 'how' to get houses built

Shelter have long been campaigning for more houses. We need around 250,000 new homes per year to keep pace with the projected growth in households and even this doesn’t address the cumulative shortfall of past decades. Unfortunately, we are currently building around half of this. If this trend continues, prices will continue to grow at a fast pace putting a strain on families’ lives and budgets.

But the stage on from this is about how we get houses built. Earlier … Read more

Policy merry-go-round on either side of the Atlantic

Last week, we saw on either side of the Atlantic two starkly contrasting responses to post-credit crunch financial policy. In the US, President Obama firmly rejected the politics of old. Never again would the US taxpayer be first be in line to cover the cost of failing mortgages or underwrite loans the market considers too risky. Instead, he wants to see the private sector take on more of the risk as he winds down the two mortgage giants, Fannie … Read more