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Eversheds comment: Vast UK housing problem demands vastly ambitious solution

  • United Kingdom

    20-05-2014

    Commenting on news that David Cameron would be prepared to curtail the Help to Buy scheme in the UK to help prevent a bubble in the housing market, Bruce Dear, partner and real estate expert at law firm Eversheds, says:

    "Without greater vision the UK housing crisis will never be solved. For the last 30 years, UK housing policy has been a simplistic shambles - a one gear car. Every five years we re-inflate the debt bubble, and promote a mortgage boom. That’s not a policy. That’s an artificial Happy Hour. The predictable real estate hang over always follows. The good news is that we can do better than this because the UK has solved housing crises before.

    "The current housing shortage is a national crisis. It can only be solved by direct Government intervention. The public debate tends to miss the point. It concentrates on housing hot spots, such as Hyde Park flats worth hundreds of millions. They are irrelevant. What this country needs is hundreds of thousands of flats and houses in the £30,000 to £200,000 bracket, and a thriving private and social rented sector.

    "This huge problem demands a vastly ambitious solution. It is too big for the public or private sector to solve alone. State investment and social provision must play a large part. The government should match institutional investment into building new towns, garden cities and housing estates, and make such developments tax and stamp duty free zones. Each of these new garden cities and town developments should be enterprise zones (like the 1980s Docklands Development Corporation). Special powers should be given to those running them to make housing happen without bureaucratic and planning fetters. The house builders and supermarkets should be incentivised to release their land banks as part of the policy. Planning controls should be loosened to enable build to rent and Green Belt development. Local councils should be prepared to put their covenants on long leases, and to contribute their excess land and offices to a National Crusade for Housing.

    "Chronic under supply of property cannot go on forever without promoting huge social and inter-generational tensions. For all of our sakes, we must work together to create a comprehensive solution to this shortage.”

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