The housing crisis has been brought about by a failure of Governments to create a coherent strategy for the sector, says a report from the LSE London commissioned by the Family Building Society. The report lays out the key areas which need to be fixed.

If things are to improve housing policy must be far more strategic and more robust in the face of economic change (Prof Christine Whitehead)

The report argues that housing policy suffers from a lack of an integrated approach. At the national level, the Department of Levelling Up, Housing and Communities concentrates on housing supply, while the Bank of England and the Treasury act on wider macro-economic objectives. The Departments of Work and Pensions and Environment, Food and Rural Affairs have their own agendas while local authorities have to cope with the already housed and those needing housing. Infrastructure supply is another factor.

This slideshow requires JavaScript.

Furthermore, it is not clear where responsibility for optimising the use of the existing housing stock lies.

The report says no assessment of the overall impact of proposed policy changes are usually considered, which may lead, among many other things, to unintended consequences of less funding for new homes and more landlords leaving the buy to let sector.

Christine Whitehead, LSE Emeritus Professor of Housing Economics, said: “If things are to improve housing policy must be far more strategic and more robust in the face of economic change. Although this will be extremely difficult to achieve it must be attempted if housing is to get out of the current mess.”

Professor Tony Crook, Emeritus Professor of Town & Regional Planning at the University of Sheffield and coauthor says “It is equally important to get some consistency between national policy on housing and regional and local policy on planning and land supply. Something that has not been easy but must be done better.”

Ben Everitt MP, Chair of the Housing Market and Housing Delivery all party group adds: “There is an enormous housing problem to solve, and successive governments, of all colours, have not got it right. It is complex, as this report shows. We are unravelling the different strands and the next stages are to develop policies that work in harmony. My All-Party Parliamentary Group is a positive part of that effort.”

Mark Bogard, Family Building Society Chief Executive, comments: “This report shows there needs to be a complete policy rethink if we are to build a world where not only can young people get on to the housing ladder, working, growing families can move and where older people are encouraged to downsize”.

This report is the first of a number that will be published in 2023, each offering solutions in areas of housing policy that can be improved and providing a coherent approach.

The report highlights broad areas of concern,  as well as specific aspects of policy.

These include:

• The way housing fundamentals of supply and demand operate.
• A concentration on new homes and a failure to implement measures to optimise the use of the existing housing stock.
• Inconsistent and incoherent policies such as the proposed infrastructure levy. As currently defined, it will be a charge on the sales value of completed developments and will be locally set and spent on local infrastructure and new affordable homes. If the same amount of funds were to be raised as they currently are through planning obligations revenues, even more than now (maybe 70 per cent plus) would be raised in high valued areas of the South of England – leaving areas in Northern England with large numbers of brownfield sites unviable.
• So, while the levy potentially raises additional funding, it also exacerbates regional and social inequality – almost the opposite of levelling up. Moreover, the funds are going to be stretched to include securing biodiversity and nutrient neutrality objectives and may ultimately leave less for new homes.
• The national target of 300,000 new homes is to be kept with proportions allocated to each local authority – but these are to be advisory only. Every authority would be free to set lower (or higher) targets based on local capacity and character. Given uncertainties both about the planning system and the economy, new supply is almost certainly going to fall.