One million homes: how to build a million affordable new homes in the next five years and still cut the public subsidy
- Document type
- Seaford, Charles
- New Economics Foundation
- Date of publication
- 11 November 2010
- Trends: economic, social and technology trends affecting business
- Business and management
- Material type
This report explores how practical measures to change planning laws, reform capital gains tax and change the way that social housing is financed could help solve Britain's housing crisis, while still reducing the public subsidy. This will involve:
- Measures to reduce the cost of land: changes to capital gains tax and planning rules that help ensure more of the value created by planning decisions benefits taxpayers and tenants.
- Measures to reduce the cost of capital for new homes: bonds with returns linked to the retail price index, and designed to allow housing benefit to be paid directly to bond holders, combined with new financial structures; these measures may push down the cost of capital to the point where it is economic to replace government capital grants (to build houses) with revenue grants (to support interest payments), but even if they don’t, they will make capital grants go a lot further.
- Measures to increase landlords' operating margin: a tier of housing between existing social housing and the private sector, with somewhat higher rents and lower operating costs than at present.
Depending on assumptions, these measures would lead to savings ranging from one-third of those proposed by the government to over £1 billion a year more than those proposed.
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