Delivering an enduring response to the impact of Covid on the quality of home life

Summary

Housing should not be regarded as an investment vehicle, to increase the wealth of some at the expense of others. It should not be sold to the highest bidder. It is a basic human need, that should be enjoyed by all. My vision is an ambitious one – to ensure safe, secure and affordable homes for all. This paper does not provide the space to do more than briefly outline a range of measures which could realise this. We owe that to nurses, care home staff and others who have toiled through the Covid epidemic on minimum wages. If it can be realised, by whatever means, it would in may estimation, represent a bulwark of social stability which, as a Nation, we can be as proud of as the NHS. Turning the vision into reality

There are three main steps – tackling affordability levels, delivering secure homes, and financing them.

Step 1: Tackling affordability levels

The planning system is charged with delivering sufficient new homes to meet expected market demand. It does not however halt the steadily rising affordability gap which increasingly prevents people accessing and retaining the homes they need. The only effective method is through some form of mandatory price control. For every household, lower housing costs would release greater discretionary expenditure into the wider economy. If formulated and exercised in a manner that gives significant social benefit, and is enforced fairly and consistently, there is therefore no reason why it should prove politically unattractive. It could operate by:

1. Setting a base date from which price control would be introduced. Allowing housing costs (sale prices and rents) thereafter to grow only in line with a national House Price Index, which reflects factors such as wage growth, cost of living indices and/or a fixed percentage in much the same way as the State Pension’s “triple lock”;

2. Fixing the price/rent at which individual properties can then be marketed after the base date (perhaps using Council Tax bands rather than individual valuation, unless unless warranted) and applying the relevant growth index as years click past.

3. Applying the price control at the time of sale or rent review, binding sellers, buyers, landlords and renters. If using Council Tax bands, the offer and purchase price could be within the range of the index adjusted band, not exceeding the maximum of the band. Any breaches could be rectified when the sale is identified at then time of registration by restorative taxation attaching to both buyer and seller/renter.

Step 2: Delivering secure homes

Avoiding a dependency culture requires as many households as possible fully fund their own housing costs themselves, as most do now. I do not envisage a return to widespread building of social housing. Those approaches have been seen to expose divisions in society, force restraint on tenants’ aspirations, and have proved to be unfair, inflexible and uneconomic. Rather, I propose a fluid “estate” of measures that can be tailored to support those who, for whatever reason, find themselves needing a helping hand to obtain or maintain a suitable roof over their heads. This “estate” would be managed by a “home security agency”, engaging the existing network of existing social housing players (local government departments, housing associations and licensed charities, such as “Shelter”,“St Mungo” and “Crisis”). Its remit would be to initiate timely solutions for all who are homeless or face potentially chaotic disruption and distress to family life when facing unavoidable need to leave their existing home (such as into care). The agency might provide traditional social housing (for rent, sale or shared ownership) by commissioning or buying “new build” homes, or acquire suitable existing properties “bought in” for re-sale or rent and perhaps, after refurbishment, conversion into larger or smaller units or adapted from other uses. Loans, discounted mortgages and payment breaks may all be considered, as well as grants and temporary or permanent rent subsidies and the operation of hostels. Innovation is the key, and might, for example (for those part way through their mortgage term) negotiating part or whole ownership of the home concerned as a form of community “equity release” or temporary tenancy. Indeed, anything that enables households to get back on their feet and be helped to “staircase” to a suitably secure tenure, or elect to move to more affordable accommodation when ready. Conversely, some cases might involve no more than helpful counselling or advice.

Step 3: Financing the secure homes

Although the secure homes could be financed by taxation, my own suggestion is that the system should have “community ownership” to transcend party politics and fixed parliamentary terms. For that reason, I suggest a form of insurance typified by NHS funding, but with the option of voluntary additional contributions. There is no room here to expound this in detail, but I envisage three main components:

1. A one-off capital gains tax on the equity held in mortgage-free homes (generally over and wealthier, who might benefit in return from the help to access to retirement accommodation). For fairness and palatability, it should be applied only to equity accrued after a fixed date (past, present or future) and made payable only at the time of sale.

2. A compulsory deduction from earnings from those in work – as with NHS, but effectively paid by by a part of each household’ s increased spending power released by the house price control mechanism.

3. Voluntary contributions, attracting individuals and institutions seeking a replacement secure option for long term investment. This would match closely with pension savings, especially if the return was paid in a way that provided greater choice of accommodation and care in old age (for individuals or employees).

Conclusion

There are no doubt other approaches that might come forward from others. My purpose is to stimulate constructive discussion having identified some fundamental principles and opportunities. Importantly, evolution of suitable policies must be pursued in a spirit of “how we can….” rather than “why we can’t…. ” Be bold. Let’s do it!

 

 

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