Spotted by DBC Reed in The Sun, “which regrettably these days is more on the ball than this blog which is too often down with the Beleavers on the beach worshipping the Brexit Cargo Cult.”:
Back in the early 1990s, low and middle-income workers needed to save five per cent of their wages for three years, on average, to build up a deposit for a first-time property. Today, they need 24 years of such savings. That’s why home ownership has dropped sharply, particularly among youngsters.
As house prices spiral way ahead of wages, driven not only by a growing supply- demand chasm but also ultra-loose monetary policy, more and more youngsters from relatively affluent families are being priced out. The emergence of “generation rent” means the political geometry is shifting.
“If prices keep rising, home ownership will fall further and for the Conservative Party, with its base in home ownership, that’s disastrous,” says Alex Morton, who was Cameron’s housing expert in the Downing Street policy unit, “Tories want a society where if you work hard and do the right thing you can own your own home and get on, and that’s becoming increasingly difficult.”
More than half of first-time buyers in 2015 had assistance from “the bank of Mum and Dad”, rising to two-thirds in London and the South East. Such realities lay bare an uncomfort- able truth — the growing gulf between “property haves” and “property have-nots”.
There then follows a load of gibberish saying that high prices are due to lack of supply, it can be explained far more simply than that. Moving on…
Sajid Javid, the Communities Secretary (who grew up above a shop in Rochdale in a two-bedroom flat with his four brothers), has come out fighting. Last month he used his speech at the Conservative conference to accuse the UK’s large house-builders of deliberately restricting supply to boost prices, and therefore profits.
The “big developers” have “a stranglehold on supply”, said Javid, and are “sitting on land banks”, while “delaying build-out”.
The idea of “land-banking” — with the biggest house-builders remaining on go-slow to up their profit on each unit — used to be dismissed as a conspiracy theory. In recent months, that has changed. A quarter of all new homes in the UK are built by the biggest three providers and more than half are provided by the top eight.
There’s increasing evidence, though, that while the planning system remains cumbersome, more and more permissions are being given. Yet the homes are not being made. Internal government figures show that in the past three years, while there was a 46,600 rise in building units granted permission, there was a 94,300 rise in such units remaining unbuilt — with the entire increase in planning permission being absorbed by increased “land-banking”…
Fired by such evidence, the Government is set to publish a white paper on housing next month, with fines on building delays being touted and developers possibly being charged council tax on unbuilt units after a certain period. “There will be carrots and sticks,” says Javid.
It's not exactly LVT, but it's a start.