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Saturday, May 13, 2017

Liberal Democrats propose serious measures to tackle housing crisis

It was only two days ago that I blogged here on Britain's housing crisis, highighting the appalling statistics that show how deeply we have sunk into the mire.

In particular on the issue of affordability, there is the study by Price Waterhouse Cooper in July 2015, which concluded that by 2025 half of all under 40s will be renting privately.

And of course the fact that faced with an acute shortage in the supply of affordable and accessible the UK Government is actually halving its subsidy to Housing Associations, spending just over £1 billion on helping them build new homes, whilst subsidising the growing demand for housing to the tune of £25 billion each year.

I am delighted therefore that the Liberal Democrats are taking this seriously at a UK level as shown in this article by Tim Farron in the i newspaper. Tim identifies the basic problem, that despite everybody acknowledging a shortage of homes, we are not actually putting shovels in the ground to address this issue.

The five proposals he puts forward are a sensible start to dealing with this crisis. He suggests:
Although I have reservations about shared ownership schemes and think 50,000 new social homes a year is not enough, this programme is far more ambitious than we see from the current government and more deliverable than that proposed by Labour.

Importantly, the proposal to make finance available to small builders is cricial. At present this is a major handicap to developing smaller housing schemes around the country. As I said in the article two days ago Vince Cable identified that the banking crisis has seriously affected credit to SMEs in the building industry.

In his book, 'After the Storm' he says that we have the ludicrous position where banks will lend to purchase homes but not to build them. As a result the supply of houses is now dependent on large builders that have access to equity and debt markets.

Two decades ago 50 per cent of new builds were by companies contributing up to 500 units and the level was only a little lower in 2009, but since the market crashed, the bigger builders have accounted for 70% of supply.

I am pleased the Liberal Democrats are determined to address this imbalance.
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