Our housing market is broken. While this may sound like a moaning millennial gripe list, do bear with me.
Under our current economic system too many are being left behind by deliberately perpetuated market failure to benefit those amassing capital in the property market. In a universe of ever increasing wealth, housing across the world is bought, sold and bet on as a commodity, used to enrich producers, bankers and balance sheets, and sustain a struggling market built on the unsustainable principles of ever rising prices and ever indebted risk.
Governments of all colours look to almost guarantee house prices over their election terms while pointing to an apparent “lack of supply” as the issue in addressing the unbalanced market and rising prices. But, with the capital-rich few buying up swathes of new housing across towns and cities, land banking and cashing in on ever increasing rents, prices and housing benefit, can we really continue just crossing our fingers for the market to adjust itself in favour of those simply wanting a place to live?
No. The market has lost our trust. Only through more affirmative regulation will we bring a democratic and social value perspective back to the housing market.
At its most basic and simplified theoretical level “the market” should adjust itself, making housing more affordable. In practice however, vested interests in our economy perpetuate a system built on housing as an investment avenue for the already enriched few. This is not a free market of informed and financed consumers, but a secure capital storage initiative for the nation’s collective wealth. For some, property purchase is interchangeable with investing in gold, stock, shares, Bitcoin or other tradable commodities. These practices are locking a generation of citizens out of a market system that doesn’t accommodate them and values capital security and profit over ensuring all have a place to call home through renting or buying.
Politics has started to recognise housing supply as a coming crisis and growing election issue. Those elected to craft effective regulation must look to democratise housing across the UK. We cannot simply continue equipping private developers with ever more market access through land, capital and incentives in the mystical hope of a general liberalising effect.
Government has ignored its responsibility to act as the housing market regulator for too long and must be prepared to enter the market more robustly. Allowing large-scale government and local authority house building at capped gross profit margins would provide a true foundational value baseline for the housing market that doesn’t exist at present. Lifting the cap on local government’s ability to borrow would aid the process.
Regenerating our outlying towns and targeting investment to urban regeneration in partnership with private and social developers can diversify and democratise our housing stock, prioritising areas of need the broken market fails to address. Further still, bringing empty properties back into use, introducing regulation about who buys and rents new homes and their terms of lease can better protect those currently left at the mercy of unchecked market forces.
By entering the market as a competitor and regulator to democratise the market in the interests of consumers, we can not only deliver long-term change, but also change the culture and social value we place on housing.
By targeted building of new homes – and importantly more social and council homes – better regulating lease and rent agreements, addressing need over profit more robustly, and introducing firm rent price controls in exceptional areas, we can reorientate the housing market to work for the many and give hope to a generation being left behind.
Reader, the future can be better, but aspiration and action must trump plain administration.
Oliver Ryan is a Labour councillor for Audenshaw, Tameside