This article authored by Rob Perrins, Managing Director of the Berkeley Group, was featured in the Mail on Sunday
Monday 28th September 2015
House prices will rocket by 6 per cent this year and the number of homes for sale is plummeting. It dropped for the 11th time in a year during July.
The truth is that the demand for housing is not remotely being met.
There are some signs of progress. Councils have given 73 per cent more planning consents since the end of 2014. Record numbers of people are using the Government's Help to Buy scheme.
But stamp duty in particular has a lot to answer for. In 1997, the tax on a house worth £950,000, for example, was 2 per cent. Today, it's a whopping 10 per cent on the portion of the purchase between £925k and £1.5m. That stops people moving. And fewer transactions means the Treasury actually gets lower receipts.
So what can be done to transform the market?
I don't think it's a job for national Government. Housing was never a top three issue during the Election. Their real priorities are the deficit, the NHS, and dealing with Europe.
Meanwhile, the public sector is distracted by endless cuts (what organisation wouldn't struggle with 40 per cent less central funding?) And there is no real incentive for the sector to change. We are all taking fees, protecting our clients and our profits. That is the big elephant in the room.
What housing desperately needs is more competition from new entrants. We need more capital and more builders - councils, small builders, self-build, and international developers. I welcome it all.
But we must also face up to the Green Belt issue. This land was designated more than half a century ago. Some of it is beautiful and precious and should never be touched. But some of it isn't green at all. It includes quarry pits and disused sites that look nothing like the popular image of an emerald field studded with oak trees.
So let's have the courage to turn them into beautiful places for people to live. Keep the policy but review the designations. London cannot thrive with a population of 10 million and 20 per cent of the land classified as Green Belt.
Above all, we must stop planning to fail. Across the South-East, councils are allocating less land for development than they know is required. It's not a mistake. It's a calculated political response to public opinion. This won't change until all of us in Middle England tell our local councillor that we DO want more homes - for our children.
In reality, either the Government has to make the current market-based system work, or the State has to build a lot of the housing itself, as they do in Singapore.
I would consider an independent public body, separate from Whitehall. Model it on the Bank of England, independent of politicians and tasked with getting 200,000 houses built every year.
It should have powers over planning that can cut through the politics, and powers to push for the release of land which is not being otherwise used.
This idea needs serious debate because as things stand the job is only half done. And I don't see much appetite from anyone to leave their comfort zone.