Report urges government to start building houses to save economy

Published by Max Salsbury for 24dash.com in Housing and also in Central Government, Development, Finance

A new report urges the Government to start a huge house-building programme to pull the economy out of recession.

The report - from Financial firm Tullett Prebon - claims that over the last two decades successive governments' housing policies have been "a complete shambles".

It claims that investment in a national house-building programme might "kick-start the economy", and is one of the "very few policy options available to government".

The authors point out that increased demand increases prices, whilst a surplus of housing lowers them. The report claims that a doubling in Housing Benefit over the last decade (from £121bn to £221bn) has pushed up prices and sent waiting lists soaring by 80%.

Of the Government's attittude towards these economic trends, the report says: "This, it might be thought, is far too obvious to be mentioned at all, but it needs to be reiterated here because, where housing is concerned, successive governments have acted in seemingly-total ignorance of this basic logic."

The report acknowledges and agrees with the recent Policy Exchange findings that recommended the selling off of expensive council houses to fund house-building. Policy Exchange claims that such a move would generate £6bn; but Tullett Prebon recommends adding a further£4bn in directly-funded capital investment to this amount to drive house-building.

As well as increasing Housing Benefit costs and waiting lists, the report also highlights that young people have been unable to get on the housing ladder as prices have spiralled - again, a situation it directly attributes to the failure to build enough new homes.

It claims that housing completions are currently running at less than half of the 250,000 required a year.

The report acknowledges that NIMBYs will be a major obstacle in any large scale house-building drive and recommends that the Government takes steps to streamline the planning system and "face down local objections and expose such selfishness for what it is".