Councils need to be put in a position where they build more homes. The boost would help deliver more housing, and reduce demand pressure on the private sector, dampening price rises.
That is the recipe from Anthony Hilton of the London Standard, who in a recent column noted that last year, London councils built barely 1,000 homes. “That… is why we have a housing crisis,” he declared, pointing out that in the 1970s the country delivered more than 300,000 new homes most years, of which half were built by councils. The peak, 1970, saw councils build 176,000 homes.
Yet the current government has spent just £5 billion, mostly via housing associations, on building new homes; while it has spent £95 billion on housing benefit, “which is a welfare subsidy to families to help them meeting housing costs”. Almost a fifth of households are receiving this subsidy in some form.
More money invested with councils and housing associations, to help them to build more, would help to bring down rental costs – and so cut the housing benefit bill, argued Hilton.
He also poured scorn on government suggestions that self builders could help solve the supply shortfall. Ideas that 50,000 homes a year could be built this way are crazy, he said: “I am all for people being encouraged to build their own home, but the idea it could provide a solution to Britain’s housing crisis is risible and what is truly depressing is that someone in charge of policy seems to think it could.”
Self builders face massive challenges, he points out. They have to afford to buy a suitable piece of land, paying cash up front in competition with better funded developers; get planning permission; obtain a mortgage from banks and building societies who are wary of self-build; and find a builder with the skills to carry out the project – when many have closed or lost their skilled tradesmen in the last recession.