A structured argument for why it can be of positive benefit to consider setting limits to certain open market house sales in the UK, in order to check the worst effects of 'market failure

Field, Martin

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This work has been submitted to NECTAR, the Northampton ElectronicCollection of Theses and Research.Conference or Workshop ItemTitle: Is there a cogent argument to make for seeking a deliberate reduction in UKhouse prices?Creators: Field, M.Example citation: Field, M. (2013) Is there a cogent argument to make forseeking a deliberate reduction in UK house prices? Invited Presentationpresented to: Housing Studies Association Annual Conference 2013: ChangingPolitical, Socioeconomic and Institutional Landscapes: What are theConsequences for Housing?, University of York, 10 - 12 April 2013.Version: Presented versionhttp://nectar.northampton.ac.uk/5548/NECTARHousing Studies Association Conference 2013  University of York, 10 – 12 April 2013  “Socioeconomic and institutional landscapes:  what are the consequences for housing?”     “Is there a cogent argument to make for       seeking a deliberate reduction in UK house prices?”        Dr Martin Field, University of Northampton Institute for Urban Affairs / Collaborative Centre for the Built Environment martin.field@northampton.ac.uk Are UK prices high?  First 21stCentury bubble   Un-affordability ratios   Partial fall post-Recession   Constrained new supply   Second 21stCentury bubble    Why reduce them?  To maximise ownership –still the tenure of choice   To check private rents – numbers are rising & costs all-consuming   To remove poor practices (sic)   To sustain community links   To challenge the ideology of speculation and ‘investments’        Can the market not alter them in due course?   Allocate more land for building?   Raise building rates when custom is secure?   Amend lending conditions?   Raise interest rates?        Are direct interventions  evident in the UK?  Contemporary examples:  Mortgage base-rates  Minimum wages  Renewable energy tariffs   Housing / planning examples :  Fair rent mechanisms to 1986  RTB discounts post-1979  Afford Hsg Circ 6/98 & since  PPS3 low-cost ‘targets’  NPPF ‘viability’  What controls  are feasible? (1)  Price conditions set by public sector for: - disposal of land and assets - mortgage / loan guarantees - housebuilding grant / loans - affordability for those ‘in need’ - input from new ‘state bank’   What controls  are feasible? (2)  Price conditions set upon private sector participation: - % and pace of newbuild sites - within designation of sites - when sites are possessed  - deviations from local policy - future mortgage lending - conditions on resales  What issues are key?  Setting of new price controls   : capitalised rent stream + RPI?   Negative equity   : Help to Buy?   Stimulating new supply  : targets beyond volume builders   Overall regulation   : new ‘Off-Home’ role?          Would prices become  more stable?  Approach addresses money / land / building fundamentals  - New mechanisms for pricing newbuilds & resales  - ‘Use it or lose it’ element to site valuations  - Support for price conditions within lending provision  Gradual challenge percolates from price-controlled units           Would markets become more inclusive?  Mechanisms would challenge speculative bubbles  Threat to dispossess would stimulate new building  Lending requirements would facilitate more ownership  Unease over newbuild excess replaced by local support  Increased opportunities for democratic developments           So the cogent argument is....  “A clear, logical and convincing one....”  Drawing from how UK opinion cares about inclusivity .....  Examining the technicalities for providing sound intervention ....  Promoting community above ‘investment’ ......  Believing that cheaper and lower values make ideological sense .....   General references   Adams D & Tiesdell S (2013) : “Shaping Places – Urban Planning, Design & Development”, Routledge, UK   Cassidy J (2009) : “How Markets Fail”, Penguin, England  Field M (2009) : “Towards an inclusive and sustainable housing market”, TCPA Journal, May 2009, p.223 - 227  Pawson H & Wilcox S [Eds.] (2013) :“UK Housing Review 2013”, CIH Publications  “Tensions and Future Prospects for  Sustainable Housing Growth” : ESRC project 2012 – 2014, University of Northampton / Open University http://www.open.ac.uk/researchprojects/tensionsandprospects         

Is there a cogent argument to make for seeking a deliberate reduction in UK house prices?

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