Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

Memorandum by Adrian Britton FRICS (AH 18)


  1.1  I am a recently retired chartered surveyor whose professional career was initially in estate agency and property valuation and residential property management, followed by 20 years in local government service, including 14 years as an Assistant Director of Housing and latterly Director of Housing in a London borough. During this period I also served on the Housing Committee of the Royal Institution of Chartered Surveyors, latterly as its Chairman for five years. Subsequently I became an employee of the Institution, serving as Director of Professional Services and latterly as Executive Director of Corporate Strategy and Governance.

  1.2  I have never had party political affiliations and now have the unfettered right to express my own professional, personal and political opinions, which I have pleasure in so doing here in respect of the terms of reference of the Committee's new Inquiry on the affordability and supply of housing. I am sure that the Committee will appreciate, however, that in reaching conclusions on the best way forward the impact of policies (and desirable policies) in other areas, such as planning, transportation, education and taxation, need to be taken into account.


  2.1  House prices and private sector rents are determined principally by the demand for the particular dwellings' the ability of individuals to pay, their preparedness to do so having regard to their personal circumstances, aspirations and prospects, and the availability of other suitable dwellings. The cost of construction of a dwelling does not affect its value pro rata. The price of the land on which the dwelling is built is a "residual figure" what the builder can afford to pay in the light of his or her other costs and the expected sale price of the dwelling when constructed. (It follows that statutory higher environmental, space, construction, health and safety standards could be imposed in the vast majority of cases without increasing house prices and rents by more than any increase in the amounts that prospective occupiers are prepared to pay for the "better product").

  2.2  As a nation we are paying much more than we need for a basic necessity, housing, because there is a shortage of it in the (most) places where people want and need to live. Adopting a suitable vacancy rate and taking a defined policy position on the "right" to purchase a second home within the UK, the full meeting of "one home" housing requirements would reduce the price of housing in real terms, releasing personal resources for spending, saving (compulsorily for pensions?), better public services, including investment in infrastructure provision, and/or redistribution through the taxation system. However, achieving this, in my view, highly desirable scenario can only be attained gradually, because the assets and mortgage liabilities of so many are principally in home ownership, and a substantial reduction in levels of house prices, with the creation of negative equity, is not politically feasible and is not in the interest of the UK economy. Moreover the construction industry has not the present capacity to achieve the "transformation" rapidly; the need to expand of the construction industry requires urgent attention.

  2.3  Reducing housing prices (both in home ownership and private sector renting) in real terms by fully meeting need has other economic and social advantages additional to those mentioned in the preceding paragraph. Some of these advantages will be identified below.

  2.4  Also, it would be desirable economically and socially, to achieve parity of housing sector esteem, to levy all local authority and housing association rents at assessed market levels, thus sweeping away the terms and concepts of subsidised and "affordable" housing. A housing allowance scheme would be necessary for those households unable to afford the market rents (irrespective of ownership sector) of reasonably suitable dwellings in the particular region for households of the particular sizes and composition. I believe that some steps in this direction are on trial in some areas at present, with the more limited aim of preventing rent inflation as a result of the availability of housing benefits. The rules and tapering of the housing allowances to balance disincentives to working and to seeking promotion in employment would need careful consideration. Deductions from the housing allowances otherwise payable should be made to reflect "unacceptable' levels of under-occupation arising and maintained after a specified period. Please see also paragraph 3.4 below.


  3.1  Home ownership is part of the culture and the aspiration of the vast majority of the adult UK population. I believe that this aspiration is not based purely on the perception that the value of owner-occupied housing rises faster than inflation and is therefore a good investment. (If this were so then that perception would wane if housing demand and supply were brought into equilibrium.) The aspiration for home ownership is based also on the perceptions that, provided that the mortgage repayments are maintained, home ownership brings with it security of occupancy (with the facility to move when the occupier rather than a landlord chooses); the opportunity to build up financial security and borrowing power through accumulation of asset value; the prospect of reduced housing costs when the mortgage is paid off; and the ability to pass on the value of the property to family members on death. Paying rent is often seen as a waste of money when owner occupation is a realistic option.

  3.2  A further benefit of owner-occupation is seen to be the greater attention that owner-occupiers give to the appearance and improvement of their homes and environs than many landlords and tenants do, to maintain and improve utility and asset value. This activity creates social pressure on other owners to do likewise and to take steps to discourage nuisance, vandalism and other crime.

  3.3  I believe that the present lack of opportunity of many of the young, especially the single (including those affected by household break-up, since house purchase usually requires two income earners) and those from less affluent families, and of those others unable to command sufficient income from employment, to step on to the home ownership ladder will become increasing resented by them and their parents. In my view it is desirable that public policies be adopted and implemented to open up home ownership as a realistic choice for all in "permanent employment" who aspire to it. Most graduates, and others, wish to "stand on their own feet" and make their way in life independently, rather than have, where possible, to ask their parents' financial help. Governments' failure to ensure that young adults in employment can afford home ownership without seeking their parents' financial help is, I believe, increasingly regarded by such parents as an implied but resented government expectation. It seems to me that it would be much fairer to all if government policy was founded on a stated assumption that state assistance to adults of 22 and over will be framed on the assumption that their parents have no further financial or other responsibilities towards them.

  3.4  The extension to owner occupation of the housing allowance scheme advocated in paragraph 2.4 above on the same formula, pitched to fund a 100% mortgage on a "deemed suitable for the household" dwelling in the particular area, would give all in full-time employment but in need of financial assistance to afford their own homes a real choice of tenure and the ability to change that choice when they wished. I believe that giving all the employed the opportunity of a "stake in society" could reduce substantially the extent of disaffection which many younger people with low incomes harbour, and which stimulates crime. Further, it seems to me quite wrong that special schemes are apparently required with ring-fenced funding to enable teachers and other "key workers" to buy homes, presumably effectively locking them into employment in this sector and detracting from their housing mobility. What does this say about the level of salary and status deemed appropriate for such vocations? And surely these factors must deter some of the best suited to these jobs from seeking careers in these sectors, foregoing some of the advantages described in the paragraph 3.1? Transitional arrangements for extension of the suggested housing allowance scheme to the owner-occupied sector might be necessary to prevent unnecessary house price inflation through a lack of supply dwellings for sale. Ideally the supply of dwellings for sale in the particular region would be increased before the expansion of the purchasing power which the housing allowances would provide. A temporary right to buy their existing home might be accorded to those previously paying rents below market levels, to mitigate demand for private sector dwellings.

  3.5  I confess to not having computed the gross cost a housing allowance scheme on the above lines, but point out that there would be other public sector savings/income resulting from ceasing to subsidise the cost of some dwellings, the economic growth that more housing would stimulate, reduced unemployment from a larger construction industry, higher employment resulting from the incentive to work to gain a housing allowance entitlement to support house purchase, and a reduction in the costs of crime and ill-health. Moreover meeting reasonable housing requirements is a matter of priorities' a higher one in my submission than foregoing income tax on ISAs from those able to invest £7,000 a year and paying £200 fuel allowances to pensioners paying higher rate income tax, and windfall gains in land values going largely untaxed. Also, I suspect that more, younger households in their own self-contained housing would increase the birth rate, a longer term economic advantage.

  3.6  I see two dangers of making home-ownership an option for all employed households:

    (1)  People may be tempted to buy relatively cheap dwellings which have environments and disadvantages which make them very difficult to sell, especially in weaker market conditions. I suggest that there should be a specific obligation on the proposed home condition inspectors to identify such properties in their reports. Lenders should be obliged to reflect this matter in the loan to value ratio they adopted.

    (2)  Notwithstanding what I have said about home ownership instilling pride in dwellings, there would be some young people who would be entitled to the envisaged housing allowances facilitating home ownership whose life styles would cause substantial annoyance to their property-owning neighbours. The nation would be "trading off' some street nuisance from youngsters who are inclined to go out more to be away from the parents with whom they are lodging, for more neighbour disputes.

  3.7  I do not favour the active promotion of greater homeownership as a matter of public policy. I believe that would be socially divisive. I believe it is better for government to provide a level economic and tenure-neutral financial and planning framework, and thereafter let the market decide the balance of home ownership and rented occupation.

  3.8  The expansion of new housing supply to meet all requirements upon it is a politically difficult matter. Because it is thought to devalue existing property and change environmental character, the "not in my back yard" syndrome is rife and makes it very difficult for local councillors to support suburban and green field housing land allocation and development. I regard attempts at the introduction of regional government and planning authorities as an attempt to circumvent such problems. In my view central government has an over-riding duty (to which it is paying increasingly courageous but still inadequate attention) to ensure that the nation is suitably housed, and I really do wonder whether the retention of planning powers within democratic local government is in the public interest.

  3.9  Fly over the United Kingdom and any objective person should conclude that there is plenty of room in this country for enough housing for everyone without causing an unacceptable amount of environmental detriment, but that is not to say that I favour "green field" housing development wherever there is a market for it. In particular, London and the South East is under particular pressure and it does seem to me that more needs to be done to encourage location of new employment and housing outside this region. This ought not to be so difficult as it was, having regard to the extent to which communication can now be carried out electronically.

  3.10  In my view not enough attention has been given to the need to redevelop large, older urban areas incapable of piecemeal renewal, and creating new environments and schools acceptable to households of all income levels. The scope for higher densities in such areas is often substantial, but the amount of existing owner occupation dictates that compulsory purchase is almost inevitable.


  4.1  Over the last forty years the effectiveness of UK housing policy has been dogged by a lack of political consensus. The removal of mortgage interest tax relief has reduced the housing political temperature substantially. I do urge the political parties to find common ground on the matters of the full meeting of housing demand; where that demand should be located; and the provision of adequate financial support to households who need it (rather than to the cost of housing provision), to remove unnecessary uncertainty for the private and corporate sectors in taking housing investment decisions. In the longer term, this approach would minimise the need for public financial support for housing provision and households' occupancy costs, and reduce public sector costs related to ill-health, social discontent and consequential crime stimulated by insufficient and environmentally unsatisfactory housing.

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