General Article Building more homes won’t solve UK housing crisis, new report argues

Topic Selected: Housing Book Volume: 396
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Despite rapid house-building, UK house prices have grown 160 per cent in real terms since their low point in 1996.

By Oleysa Dmitracova, Economics and Business Editor

Simply building more houses is not the answer to Britain’s housing crisis, an economist argues, making the case instead for increasing the supply of social housing, subsidies for first-time buyers and measures to encourage private landlords to sell their properties.

UK house prices have grown 160 per cent in real terms since 1996, rents are relatively high and home ownership has fallen over the past 15 years. But, despite common perceptions, tight housing supply is not to blame, according to a 48-page report by Ian Mulheirn from the Tony Blair Institute.

“The supply shortage story is a red herring,” he says.

“The real culprit for sky-high house prices is low global interest rates that have made it easy for home owners and investors to take on large amounts of mortgage debt and pay ever more for houses.

“Meanwhile, a sh...

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