Last month’s government white paper on the UK housing crisis openly acknowledges a problem but does not propose much in the way of a solution – particularly where landlords and affordable rental housing are concerned.
What it proposes
The government white paper points explicitly to out-of-control rises in housing prices in recent years and observes that the prospect of buying a home is nothing but a "distant dream" for young families in the UK. So the thrust of the government’s plan is to make it more feasible for these young families to purchase their own property.
And how do they propose to do this? By increasing the rate of home building by tens of thousands of properties a year. The idea is to flood the market with more supply in order to bring down costs.
Where the problems are
There is nothing wrong, in principle, with supporting more building. But the effects proposed in the white paper will be a long time in the making and may leave landlords and would-be homeowners hanging for several years.
The white paper does nothing about the hefty fees levied on buy-to-let owners by past administrations, like 2016’s hike in stamp duty. These types of fees keep landlords from being able to build and maintain affordable rental housing, which is without a doubt the quickest fix for people looking for a home.
Additionally, while the white paper acknowledges that "only around 11% of land in England has been built on," it proposes little in the way of expanding the areas available for more building.
The paper’s authors have refused outright to open up now-restricted areas for development. They propose instead that new homeowners may have to manage with smaller living spaces as a result of urban congestion. That's hardly a solution when there is so much of the country left to build on.
What to do
The government needs to start by repealing the mistakes of past administrations, including the hefty stamp duty tax and limits on long tenancies.
While these ideas were well intentioned, they actively prevent buy-to-let landlords from providing affordable housing for those who do not currently have the savings to buy.
They also restrict the freedom of choice on the part of people who would prefer to rent.
Not everyone is ultimately looking to be a homebuyer. The upward trend in renting in recent years is not just a result of market forces, but lifestyle changes as well.
As young people are increasingly mobile, changing jobs, entire careers, and cities every few years, it makes sense that many of them would prefer renting to buying. Hampering landlords from being able to supply affordable housing does nothing for this demographic.
Additionally, the government needs to remain open to building in places that were previously undeveloped. The country does not just need more homes; it needs more homes in the right places. Whether or not it sits well with many politicians, this may mean opening up previously restricted areas to build.