A housing market white paper suggests a number of reforms, including encouraging new lenders to offer long-term fixed rates to cover the cost of energy efficiency upgrades, increasing stamp duty on second houses, and providing incentives for downsizing.
In order to attain a realistic vision for UK housing, the paper “A vision for the UK housing market” focuses on the adjustments that must be made to the effectiveness and quality of the current housing stock.
According to authors Anna Clare Harper and Emma Fletcher for the Whitehall Group, a forum of the Cambridge University Land Society, there are no workable government policies to address the supply issues and the challenge of improving the energy efficiency of the UK’s housing stock because there is no clear, realistic vision for the housing market.
The issue, according to Harper and Fletcher, is that true problem-solving policies are frequently unpopular. The goal of this paper is to start shifting the debate and, most importantly, policy in order to start sparking genuine, good, long-term change.
For already-existing owner-occupied dwellings, the following housing rules are advised:
- To enable the release of scalable capital at reasonable rates to pay the costs of home renovation, make it easier for new lenders to enter the market by providing long-term fixed rate mortgages backed by institutional bonds.
- Downsizers who cut the number of bedrooms in their property by two or more are exempt from paying stamp duty.
- Relax the regulations on ‘granny annexe’ construction and multi-generational house modifications.
To facilitate energy-saving retrofits, relax listed building controls..
- Renovating inhabited private homes and adding extra bedrooms should be simplified or VAT removed for goods that conserve energy.
- Align the EPC rating of a property in part with the council tax. To encourage house investment and increase revenue, the energy performance-linked part should rise gradually towards 2050 (the UK’s goal to achieve net-zero emissions).
- Demand that sellers include a RICS building survey in their seller package.
Stamp duty on second residences should be raised.
- Dame “This paper seeks to look right across the problems in housing and takes a holistic view of solutions, proposing policies without fear of vested interests,” said Kate Barker in the foreword to the white paper.
“All people thinking about housing difficulties will be familiar with the concerns of supply and distribution of space, but adding in quality and the urgent issue of energy efficiency gives this study more punch.
The main recommendation is for a more integrated and cogent housing strategy. This should involve HM Treasury and banking authorities in addition to not frequently switching housing ministers. Only then would we be able to define and make progress towards housing market success.