This report gives a worrying prognosis of the future for Britain’s renters, including the catastrophic prediction that private sector rents may rise by 90 percent in real terms by 2040, more than twice as fast as wages, forcing thousands of households into poverty. It should be a wake-up call to anyone interested in fighting poverty in Britain.
But the report’s solutions, which focus on the construction of new social housing, are to some extent just a sticking-plaster. Building more social housing will do nothing for first-time buyers or private renters and will simply shift the rising cost of housing from some tenants to taxpayers in general. This is not sustainable: we need to make all housing cheaper by making it easier for the private sector to build new homes.
Housing is too expensive simply because too few homes are being built. This is in large part a product of the planning system, which is massively weighted against the construction of homes that people want to live in in places people want to live. If we liberalise the planning system, including making it easier to build inside cities and on intensive farmland around cities, we can cut the price of housing and avoid the nightmare scenario the Joseph Rowntree Foundation have outlined. We should tackle the cause of the problem, not the symptoms.
Commenting on the Joseph Rowntree Foundation's new report projecting real private sector rents to rise by 90% between 2006 and 2040, Research Director of the Adam Smith Institute, Sam Bowman, said:
Notes to editors:
For further comments or to arrange an interview, contact Sam Bowman, Research Director, at firstname.lastname@example.org / 07596 826323.
The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.