That is really good thought and post , perhaps not many people realize it

I am moire concerned about the hundreds of vacant and deterioratiing property which could be pressed back into service as council accomodation rather than building new homes on greenbelt, why not initiate a givernmental scheme to buy up and refurb all the empty houses soonest and use them, in my town alone I pass 15 long empty residential buildings every day

Ah lets see build more social housing and remove the right to buy until you have lived in it for ten years, believe it or not building more houses will not help the poor only housing for the poor will help them. better still pay everyone a decent wage and hey presto mortgages will go up.

The number of posts about housing on this site and others are a clear testament to the importance of this issue politically. It is therefore high time that Compass and the Government both came up will precise and detailed strategies to combat this problem in the long-term, rather than just issuing vague statements of concern and short-term palliative measures.

The housing problem will only be solved when the Government first acknowledges the three primary causes of the problem, and then implements policies that rectify each of these factors in turn. This means tackling: (i) house price inflation; (ii) the shortage of building land; (iii) the high price of that land and the speculation that results from it.

(i) Tackling house price inflation means controlling the balance of supply of new homes, and the supply of buyers. You control the former by building more properties, and the latter by setting a minimum mortgage deposit percentage or amount. As I have argued before, in order to guarantee independence from political manipulation, this mortgage deposit threshold should be set by the Bank of England's monetary committee at the same time it sets the base rate to control CPI, with the aim of keeping house price inflation within an agreed range close to CPI.

(ii) Limiting the availability of mortgages will control inflation but it won't necessarily deliver more new homes. However, as the deposit threshold rises, the political pressure on the Government will increase and so it will be forced to build more. The primary obstacle to this building programme, though, is our planning regime. As this is mainly controlled by local councils it can only be solved by incentivising those councils to free up more building land and give consent to more planning applications. Government should therefore give each council an annual house-build quota to meet. Those that meet their targets get additional infrastructure support, those that don't get massive increases in council tax. Politically this is a win-win for Labour as the increase in homes for first-time buyers will be popular with the electorate, whereas most of these new homes will be in Tory run counties. Thus the NIMBYs who object, or get clobbered by the council tax increases, will be mainly Tory voters.

(iii) The proposals in (i) and (ii) will yield house price stability and more homes for private buyers, but these will not necessarily be affordable. To achieve affordable or social housing you need to tackle the other cause of unaffordability, namely the high price of building land. With agricultural land selling at about £5k per acre and building land at £500k per acre the opportunities for speculation are clearly huge, hence the recent growth in land banks. However, if these capital gains were taxed with CGT at 90%, this money could be used to fund affordable housing on these sites at no cost to the taxpayer. In this way, developers could be encouraged to forgo the CGT on their site if they hand over 25% of the completed homes to the State pro bono. Thus everybody wins except the land speculators, but even with CGT at 90% the land speculators could still make a ten-fold profit on their investment, so they can hardly complain either.

The policies I have outlined above are the ones that we should have adopted during the property boom of the last decade to at least ameliorate the effects of the current recession, and to prevent any future housing-boom-fuelled recessions. However, given where we are now, we need to go further. As Rowenna points out, the Government needs to connect the people's demand for social housing with the suppliers' desperation for work. The Government should borrow more in the short-term to invest in housing and buy up the available stock. However, unlike borrowing for other infrastructure projects, much of this money could be recouped in the future through private sales of some of these houses as house prices increase. This would counteract any future inflation, and be totally Keynesian. It could also allow the funding to be made through dedicated housing bonds that would ultimately be self-financing and fiscally neutral, and would not add to the long-term debt of the country. What the Government should NOT be doing, however, is using public money to bail out construction companies, particularly those that lost money on land-bank speculation. They gambled and lost!

Rex: I am afraid that land for building is entirely supply driven, and there is no simple way around that. Land registry is pretty well built into the British constitution and law. The Government has very few options. It can buy up brown-field sites for building; or it can subsidise land purchase; or it can buy land and build houses for rent or sale. But that is pretty well it. A huge government intervention will once again depress house prices and spark another financial crisis. The Government has limited room for manoeuvre.

Everywhere I go I hear this story or stories like it, and yes I accept housing problems are real and are urgent. But tell me how is living on the streets with a young baby better then living in bed and breakfast, or a hotel, or even a shelter, come on for god sake, I know of no council which will not give top priority to a young mother and child.

Many people refuse a shelter a temporary accommodation bed and breakfast or a hotel thinking if I take this I'll never get a flat they will just leave me, I suspect that might be true, if you have a baby it's the baby that needs the care not the girl.

The issue of housing will not be addressed until it is separated from the market.
A place in which to live is too important and is subject too much to scarcity to be left to the strictures of an unsympathetic money making mechanism.
In recent years property has demanded a price that is two or three times the cost of construction. Where is the surplus going?
Insurance companies use a figure of £1000 per square metre for replacement cost.
The average house is 100 square metres so should cost £100,000 plus land cost.
If the land cost element is the problem then a government that has a will to make inroads into this issue will take whatever drastic measures are required to make land available at a sensible price, say, ten percent of the cost of the house that stands on it.
Market mechanisms cannot be applied to land because the stuff is out of production so it’s supply cannot respond to market pressures.
Home buying families who are feeding money into the pockets if profiteers are unable to be independent and to participate in the wider economy.