Policy Exchange Proposal will boost UK Property Market
Last week the Policy Exchange think tank issued a proposal for councils to sell expensive properties on their asset sheet, and utilise the money raised to build new affordable housing.
Here is a summary of the main points in their report. Expensive housing is categorised by above the average house price.
THE FACTS: Property market & economy benefits
- – Generate £4.5Bn a year
- – Create 340,000 jobs
- – 170,000 new homes, halving the council waiting list
- – 816,000 houses that are above the national average
- -The total value of expensive social housing is £159bn (£71.9bn of it in London)
However despite all these positive benefits there has been much protest in the press over the last week. Here are PropVestment’s counter-arguments in favour of this proposal
1. Frees up houses for young buyers
If the council sells up certain properties in areas, often they are still reasonably priced than private sector properties. This way younger people can more easily get on the property ladder.
Here is our own example as featured in the Daily Mail a couple years ago. Click here
2. Jobs will be created in the construction sector.
As long as there is a minimum requirement for locally employed people in the construction of the new houses, many jobs will be created, in turn boosting the local economy from the multiplier factor. In essence this proposals releases trapped money stuck in bricks into the local economy, taking funds from private sector into the local economy.
“In essence this proposals releases trapped money stuck in bricks into the local economy, taking funds from private sector into the local economy. “
3. Increase Housing supply
As building a new house is cheaper than buying a new house, this will mean that the money raised from selling one property will mean more than one property being built. Hence relieving the pressures on the housing market. It will mean private landlords having less opportunity to rent to council tenants and therefore, increase supply on the private market reducing the rents in the process. This will benefit the average person who is not a home owner.
4. Argument of disrupting communities is wrong!
New build developments will create new communities with modern facilities too.
There will be more environmentally friendly estates, planned better to provide for the community better.
5. Argument that it will create ghettos is wrong.
There will be new development. It only becomes a ghetto if we make it a ghetto. That is not a flaw in proposal, but one in the people. As long as users respect each other and the community there will be no ghetto created. This is an issue for not for property divisions of government or councils but one for community support and education.
6. Argument that in HMO cases you can not leave a building half used- Wrong
HMO (Houses of multiple occupancy) mean that under the policy as people move out, their rooms will not be refilled as council will want to sell off the property. The argument goes that leaving rooms empty is waste. The rooms can be let on AST style contracts or used for temporary housing. The council uses expensive B&Bs for this currently, why not utilise empty spots in HMOs.
PROPVESTMENT CONCLUSION: – UK Property Market
This new proposal by Policy Exchange think tank is highly beneficial to the UK property market and economy. It may need refining in a few areas, but the benefits of housing and job creation far outweigh any counter-argument raised so far.
PROPVESTMENT were featured in the TELEGRAPH newspaper on this very topic
Sources : Public Service