The best thing to do to resolve the national housing crisis

A leaked set of proposals to The Guardian newspaper recently has resulted in a front page article outlining the content of a recent report by The Labour leader of Hammersmith and Fulham Council, Stephen Cowan, about to be sent to the Labour Party.

Among some serious issues being highlighted is the cost of living itself and the problem of rising rents deemed as a result of insufficient supply of available rental properties coming onto the market.

I think there is a lot more to this than meets the eye however.

Mr Cowan suggests solutions could range from putting restrictions on the amount of rent increases and their frequency, to possibly considering scrapping no-fault evictions.

A significant problem with these ideas would of course be that such actions are likely to further restrict the already dwindling supply of private rental property being offered on the market.

Sir Kier is said to have promised to tackle England’s housing crisis if elected as Prime Minister, in part by relying on a massive socially rented house-building programme. However, there are other alternative proposals that I would like to advance for consideration and debate.

From my viewpoint, as a retired surveyor, the best solutions to be applied should retain and nurture an open market for privately rented housing, without excessive restrictions on rent levels or discriminating against good landlords simply wishing to operate in the private rental sector. I don’t think Mr Cowan has been able to consider proposals such as the ones I have been putting forward.

Firstly, it is clear that the way houses are currently marketed via estate agents, is an economically imperfect way to do so. This has to change as a matter of urgency so that buyers and renters are considered equally in any negotiations on rents and/or prices.

What is causing the increasingly unaffordable house price increases is being driven by the fact that traditionally, house price increases are being decided in liaison with estate agents and letting agents acting solely for vendors and landlords. This is what needs to change. There needs to be open market consideration by buyers and renters so that their affordability criteria can be fed into the equation. Agents need to be tasked with balancing any price / rent increases with buyer / renter affordability in the market. Local buyers and renters ought to be included for full consideration when determining which applicant is the best applicant for the house or flat in question.

The only and long overdue answer for this would be to re-regulate the marketing of all privately owned and rented residential property by improving the way all houses are marketed both from a buyers’ and a renters’ perspective.

Secondly, it is vital as part of this to make sweeping changes to residential planning rules so that local town and parishes absolutely decide user types of all residential properties in their areas, and no one else should be involved. This could also be done with immediate effect by our central government.

It is clear that to assist with the provision of additional residential dwellings in the locations where they are most needed, important changes to the planning rules are brought in such that local town and Parish councils, (which are democratically elected), should decide the residential use classes of all the houses or residential properties in their designated areas. They could do this by putting the required classifications into the next five-year Neighbourhood Development Plans. These, once adopted, would then be decided until further superseded, as housing demand locally may fluctuate and change.

For those owning residential property that has had changes to its use class, such owners must accept that when the property is next vacated, the new use class must take effect under the Neighbourhood Development Plan then in existence.

That may mean when marketing their property, that a different class of occupier may involve a different level of affordability. The risk of this would naturally have to belong to the owner of the property concerned, not the town or Parish.

Doing this would allow local areas to be able to balance the supply of suitable properties in their area with the actual demand for these.

More about this may be found in the various articles published on this web site of course.

Whilst I was finalising these unique proposals I needed to explain, to my professional body the RICS, having qualified as a Chartered Surveyor back in 1974, all about these solutions to the housing crisis which had come to my attention. They are based upon the valuation knowledge and my market awareness gained whilst conducting my inspections mostly on behalf of buyers and renters. Unfortunately, it was clear at that time (some years ago now), that RICS was not willing to sanction these changes and instead vehemently supported the existing estate agency model which is now as old and archaic as the hills!

The only realistic possibility open to me in such circumstances seemed to be to have to resign my membership of the institution, which I rather reluctantly then did. I hoped that this might not result in my proposals being ostracised by RICS as a result, but I seemed to have had little alternative except to take such a risk at the time.

In the final analysis, there can be only one preferred solution to successfully being able to solve the existing and worsening housing crisis; namely my solution.

Having arrived at such a viable solution myself, I believe RICS ought ultimately to acknowledge the validity of this cure, along with others who will hopefully consider my alternatives with fully open minds. I remain open to discussing the details of these proposals with RICS if and when they may be interested in doing this of course.

Meanwhile, I hope the next British government might take these proposals seriously and perhaps debate these either within these pages or indeed elsewhere.

For more on this please follow the link below:

The house price affordability crisis

Posted by: Peter Hendry, Housing Valuation Consultant

Author of:– The House Price Solution, otherwise known as The Hendry Solution.