Developers should be incentivised
He acknowledged that while there is no easy solution, the UK must follow overseas models to boost housing supply.
He said: “The key challenge at the moment is that the majority of the new-build market is for owner-occupied housing or for rent at market value.
“So what is the solution? Well, there is no silver bullet in this case. But there is a greater need for affordable homes through a combination of more shared ownership, social rent and affordable rent, which have to form a certain percentage of new housing developments.
“To make this happen, there will have to be incentives for developers. At the moment, they will always turn to the owner-occupied option as this offers greater returns. Such incentives could be provided through the planning framework, potentially in the form of subsidies.”
Jonathan Burridge, mortgage broker, has seen the impact of restrictions on planning permission first hand. “I know a developer who’s bought a small plot of land in Croydon and every time he puts a plan in they reject it on a different grounds,” he said.
Matthew Fleming-Duffy, mortgage and finance broker at Cherry Mortgage and Finance, argued that planning laws have to change. “Big gentry land owners have a lot of good land which they do not want to build on until they get a reason, so I would propose some form of compulsory purchase by the local government,” he said.
“They buy it for more than its current value but less than if it had planning permission.
“We’ve only built on 8% of our land. There’s lots of space that we can build on, although I know the conservationists wouldn’t be overly enamoured.”
Burridge felt that the growth of the buy-to-let sector is also stifling liquidity in the market by keeping stock under lock and key, as he has seen an ever-increasing number of buy-to-let investors keeping their properties long-term to boost their pension income.
He said: “If you’ve got landlords who are going to keep the property for 30 years that bit of stock is not going to be available to purchase for two or three generations but chances are if it’s owned by an owner occupier they might move up or sell it within a few years.
“The government could encourage buy-to-let owners to sell their stock. Why not incentivise landlords by providing them with tax breaks to sell some of the stock they currently have?
“You could also increase the tax on property income to make it less attractive to investors to buy it.”
He also speculated whether the culture of owning properties in the UK itself needs to change. “Is it a fundamental right that you earn the property that you live in? Much of the rest of the world doesn’t think so,” he added.
“Yes we need houses but do you make them more affordable? We’ve tried building cheap houses and that’s been a nightmare.”