Monday 28 July 2014

Rack renting: condemned in 1553 and still going strong.

 A report by the government's official English Housing Survey shows that it is now more expensive the average weekly cost of renting a home in the private sector, £163, is now greater than the £149 weekly cost of servicing a mortgage to buy one. Unfortunately potential new buyers are not earning enough to accumulate the deposit necessary to switch from renting to

So the rentier class has a field day squeezing the mainly young people caught in this "rent trap" for all, or even more, than they are worth.

These is nothing new  in this as this lovely prayer, presumably written by Cranmer before 1553, and found in a private prayer book of Edward VI, testifies:

The earth is Thine, O Lord, and all that is contained therein; we heartily pray Thee to send they Holy  Spirit into the hearts of them that posses the grounds, pastures and dwelling places of the earth that they, remembering themselves to be Thy tenants, may not rack and stretch out the rents of their houses  and lands, nor yet take unreasonable fines and incomes after the manner of covetous worldlings.

As as even the most limited A-level economics student will tell you , an increase in the supply of housing will bring the price down until people can afford it.  Builders claim that one of the main things holding them back is Britain's "over restrictive" planning laws.  This is nonsense.  A recent letter in the Guardian 
points out that builders hold "land banks" and wait for what they hope is for them the optimum, profit maximising, time to build.  The top seven  hold enough land to build 732 000 houses.  One of them holds enough land to furnish its needs for the next 33 years at its current rate of building.  Now that massive grocery stores are going out of fashion the supermarkets have vast hectares of land which they could now release for housing.

Land value taxation,(LVT) or site value rating as it used to be called in the Liberal Party, would "nudge" these landbankers to put their land to productive use.  This solution is so obvious it is amazing that Labour did not introduce it in all those years when it had a massive parliamentary majority.

In a visionary speech  Tim Farron, our Liberal Democrat president, has called for the building of 3 million new homes in the next ten years, enabled by taxation to "flush out" the necessary land, a lifting of the cap on the ability of housing associations and local authorities to borrow to build, and the right of local authorities to suspend the right to buy so that social housing no oner leaks to the "buy to let" brigade

These measures should be in the next Liberal Democrat  manifesto. We should not allow the housing market to remain in the hands of "covetous worldlings."

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