The Year of The Striver?

This morning's Daily Telegraph reports an excellent initiative by Michael Gove, Tory housing spokesman, that might increase the opportunities for young people to get on the housing ladder.  Mr Gove, noting that first-time buyers cannot afford to buy an average property in 93% of British towns, is suggesting encouraging a form of home ownership where young buyers would own the 'bricks and mortar' but the land would be owned by a community trust that could protect the housing stock for local people.

David Cameron has championed the young housebuyer since the beginning of his leadership but there are signs that he is also thinking more broadly of 'striver voters'.  Strivers are described in ConservativeHome's dictionary:

"When public policy goes wrong hard-working families suffer most. They are hit hardest by stealth taxes, the marriage penalty, interest rate rises and long hospital waiting lists. Gordon Brown’s means-testing maze is making a mockery of their efforts to save for their retirement."

Australia's Prime Minister John Howard has made what he calls 'battlers' a core part of his electoral coalition.  Strong policies on housing access, skills (as reported in today's FT), community safety, relief from taxation and faster access to public services will all be essential components of a Tory strategy to reach out to those aspirational voters that were so important to Mrs Thatcher's electoral success.  Mr Cameron made substantial progress in 2006 in terms of winning support from higher income and professional voters.  The challenge for 2007 is to win support among lower income voters and David Cameron's new year message suggested that he understands that.  He talked about the party becoming the champion "of working people" and he has put David Davis in charge of a commission on social mobility.

In an article for The Sunday Times, Mr Davis identified four key routes to wealth and wider success:

• Education and training;
• Working for a large firm;
• Starting your own business;
• The property ladder.

It must be hoped that the Tory leadership studies today's article by Sir Eric Anderson in The Daily Telegraph.  Sir Eric makes it clear that selective education benefits poorer pupils most.  Is it too late for the Tories to embrace this important conclusion?  Failure to do so will leave a big hole in any renewed Tory interest in the aspirational voter. 

Comments

[Matthew Dear]

I love the idea of Trust ownership of the land - it's certainly not ideal to split it from the edifice built on it, but this is a much better solution than current shared ownership schemes in which the equity is shared proportionately and rent is paid on the proportion not owned. I have a friend (teacher) who has bought under this type of arrangement and the rent they pay to Kent County Council is crippling them.

[Denis Cooper]

" ... protect the housing stock for local people."

I suspect that may already be an illegal form of discrimination under British law, and if not the EU will make sure that it is made illegal.

[Kit]

Michael Gove's idea is plain wrong. The solution is simple - BUILD MORE HOMES. Sorry to shout but what can you do when all the leading political parties do not understand the simple concept of supply and demand. The Conservatives mantra should be "build more homes" not tweak failed Labour ideas.
Cut the red-tape and let the market supply the demand.
p.s. please don't force builders to build 2 bed or studio flats - let them build real homes.

[HF]

The main problem for starters are too many immigrants.

They push up the prices of starter level homes and rents and also drive down wages.

To illustrate, each year 1m young people enter the world of work. Immigrants add another 0.5m a year. So there are now 3 people chasing what 2 people used to.

[Angelo Basu]

The Australians don't only try to promote the interests of "battlers" they also vilify "bludgers". Legal economic migrants who come here with the intention of working and bettering their position however they can should be seen as new battlers, with illegal migrants and those coming with the intention of living off benefits being bludgers in the same way as those indigenous people who aren't battling but bludging off the State.

The article doesn't say anything about the economics of how the community trusts would run- where would they get funding from and on what basis (presumably by "not for profit" it is meant that they would not be avoiding profit but rather that they would take profits and reinvest them in further land acquisition- but to start they would need financial guarantees to make them worth lending to and these would be likely to have to come from the State in many cases). In what way would the proposal differ from the existing concept of leaseholds with the freehold being owned by someone other than the tenant? To preserve the value of the Trust's land ownership there would need to be restrictions on the extent to which the "homeowner" was entitled to act as if they genuinely owned the bricks and mortar.

[renny]

Why the obsession with home ownership?

What goes up will eventually come down - lets leave the housing market alone.

[Andrew Woodman]

Where's the land coming from to build all these houses Kit? In my constituncy, the Governement are demanding 20000 new homes to be built in the next 20 years. That's acres of green belt land. What happens after they're built? We'll need more and more if we follow the same pattern as building roads creates more traffic. The idea of just building more and more houses is far too simplistic.

[Rachel Joyce]

The reason we need more houses is because of
1. increased population - mainly as a result of immigration (usually young fit people many of whom will return to Poland etc, some who may stay and have children) and:
2. increased divorce, separation and people living longer (often widows or widowers) - all small households, usually one person.
Demographics show that the increased need for housing is therefore mainly for one person or no more than 2 person households.
Our population is also predicted to decline, as is the rest of the EU in the next 50 years.
Therefore there is no need to rape the countryside to provide for these short term housing needs - brown field developments and turning houses into flats and maisonettes need to be encouraged by tax policy - perhaps no stamp duty to be paid for new houses built on brown field sites, or houses split up into flats.
Enough of the English Countryside has been destroyed - there is no need to destroy more when there is a green and sensible alternative.

[Kit]

Rachel and Andrew, you cannot close your eyes to this problem. People need homes. It is that simple. Areas of natural beauty should be protected but most bland farmland would be improved by building attractive new villages and small towns. Even Prince Charles likes this idea. The current policy of urban sprawl and increasing housing density does not benefit anyone. The Adam Smith Institutes proposals are worth a read if the Tories want a genuinely sensible policy.

[Denis Cooper]

It isn't correct to say that the UK population is predicted to decline, because it's predicted that there'll be a continuation of mass immigration, and consequently the official prediction is that the population will rise to 71 million by 2074, from the present level which is something over 60.5 million (as far as is known).

http://www.optimumpopulation.org/opt.toomany.uk.html

We've actually been building more than enough new homes for the established population and their descendants; the excess of demand over supply is entirely attributable to the effects of mass immigration, and therefore the price bubble is also in large measure being inflated by mass immigration. But we can't stop now, or the bubble will burst; we have to carry on until all of the world's 6,633,965,742 people are living here. Sorry, I meant 6,633,966,654. No, 6,633,966,944 ...

[Praguetory]

Land value tax is the best market solution.

[Praguetory]

And of course managed immigration.

[Downsize the NHS]

Hi

Totally pathetic are Kit's plans for building over the countryside.

Where do you stop? When Britain's like a sardine can?

Why does he say build houses not 1 bed flats? How will the homeless live in houses unless subsidined by the stste ie us.

Time to reduce the population by a programme of planned parenthood.

[Denis Cooper]

Equally, Kit, you cannot close your eyes to this problem. People do have homes, in their own countries, but if they come here then they will need homes here.

[Denis Cooper]

Downsize the NHS, if you mean reducing birth rates I agree. But not here; we're just about at, or a little below, the replacement rate. The problem with excessive birth rates is in other countries, and if we cut the birth rate here any further the government would simply import more of those surplus people from abroad.

[TaxCutter]

Given this idea how come Robert Owen got missed off Willets list of, ahem, conservatives?

[Kit]

Denis and Downsize, our housing problems are only partly caused by immigration. The restrictive planning laws are the main problem. Praugetory is right Land Value Tax is a good solution when combined with simpler planning laws.
To solve the immigration problem you would need to leave the EU...

[Downsize the NHS]

Hi

There's no problem then.

We need to leave the EU anyway.

[Andy Stidwill]

The main problem is that young adults are being forced to live at home with their parents because of the 93% figure.

The effect of this is to make young people less independent than in the past, which I think is definitely a bad thing.

[Tory Solicitor]

My 2p

1. I think we need to get away from the idea that anyone has a divine right to own a home. They do not. This is especially the case given that so many more people now live alone for long parts of their lives.

2. A related idea is that of subsidising the property purchases of key workers. I think this is wrong-headed. If you think key workers are paid too little, make the case. If the case is strong, we should advocate increased pay for key workers (whoever they may be)rather than costly and complicated subsidy schemes.

3. Surely the best way to help "strivers" (I think I bracket myself in this category)is to increase the personal allowance (how about no income tax for sums earnt under £8,000?). This could be accounted for with an increase in VAT so as to chime with the 'sound money' theme (at least in the short term)

[Andy Stidwill]

I'd love to know whether all these people who keep saying other people don't have a right to own a home actually own one themselves.

[Denis Cooper]

No, Kit, mass immigration is the principle cause of the shortage in housing and therefore a major cause of house price inflation. I repeat that for years now we've been building more than enough new homes to meet the needs of the established population and their offspring, despite planning delays and all the other obstacles, but we haven't been building enough extra homes to cope with the effects of the mass immigration which has been taking place.

[Tory Solicitor]

given the further enlargement of the EU yesterday, it might be time to start arguing for derogation by member states on free movement of workers.

[Mark Wadsworth]

Well, what a lovely set of ideas!

To summarise - let's leave the EU, reduce mass immigration, double the tax-free personal allowance, build a few more homes and introduce land value tax to ensure more efficient use of what housing stock we've got (if people live at home for longer that's a good thing, actually). The CLT is superficially attractive but unworkable in practice. If we had fewer "key workers" then we could pay the really necessary ones a bit more in salary, so no need for Key Worker shared ownership nonsense. And the housing bubble is going to burst.

I second all of those thoughts - I hope I didn't miss anybody out! BTW the quid pro quo of Land Value Tax (aka Location benefit levy) has to be getting rid of Council Tax, Stamp Duty Land Tax and Inheritance tax, obviously.

[Graeme Archer]

I haven't seen any evidence to support this claim that it is immigration which is causing the housing shortage in the UK. It doesn't fit with the anecdotal experience - yes perhaps .5 - 1 million young Polish people came here last year, but they weren't buying starter flats from Barratt homes in suburban Essex (not yet, though I hope a lot of them do) - most are living in multiple occupancy housing which would not be acceptable to us. I know in the hotel industry, which employs a lot of young Poles on minimum wage, households containing dozens of young people, in zones 5-6, are not uncommon. It is clearly impossible to live in London otherwise anyway (it would not be possible to buy a house on minimum wage with no access to UK social security, as of course the young Polish people are disbarred).

So I don't understand how this can be the driver for the fact that house prices are now several multiples beyond the reach of people on low-to-average incomes.

I think Kit might be onto something though I don't agree with the forceful "just build more houses and shut up!" approach! But we should look again at planning processes. When I was a councillor the whole thing struck me as ludicrous. We would spend hours discussing the type of glass we would permit a houseowner to put in their bathroom window, but were told by Mr Legal Advisor that we could have no say over the sales of entire fields of farmland into (low priced and much needed) housing.

It's one of those "long tail distribution" things again isn't it? Housing as an issue won't be solved by a Tory policy, it will be helped by a range of Tory policies. Michael Gove's idea, lucidly explained by him on the World At One, is a sensible idea to extend the amount of leasehold property we have. Another idea is raised by TomTom - we do, I believe, have quite short term mortgages by international standards, so perhaps there's something we could do to encourage lenders to offer longer term deals. Reform of planning I've mentioned. And finally - very high priority for the eventual Tory candidate for London - we should focus on those things which drive middle class people from inner cities in the first place, ie ensure crime control and high educational standards (obvious) and (more localist agenda) work to empower the real people who turn postcodes from no-go areas into des-res addresses (look at the Broadway Market Traders Association who have turned E8 from a pit into probably the most sought-after postcode of these parts, of course I'm on the wrong side of Mare Street to benefit, 'twas ever thus).

PS "Key Workers" as it stands is an arrogant nonsense. Of course teachers and nurses are key workers but so are shopkeepers and cleaners. The idea that by dint of working in the public sector you deserve access to a shared ownership scheme, but if you're on a minimum wage in the private sector then you can just f*ck off, sickens me. We should reform this too. For example I think that police officers are disbarred! I can't think of a more important public sector key worker I would like to have living locally!

[Mark Wadsworth]

Graeme, I instincively dislike the way some people blame house price rises on immigration but it would appear to be true, there is plenty of simple economic logic and anecdotal evidence to suggest that it is quite simply true. Of course, we can argue about the degree, is mass immigration to claim for one-tenth of price rises of recent years, or one-half and so on.

Anyway, what about my local Mr Minit, is he a key worker?

[George Hinton]

To resolve the housing crisis you need to build more homes. To resolve the lack of affordable housing you need to create more social housing, the council homes that were sold off in the thousands under Maggie's right to buy, which means giving more funds to local authorities, not trusts.
As for the rest, let's just look at the proposal that HQ impose quota's, impose candidates and engage in positive discrimination. Where's the fairness and how does that motivate a striver?
Meritocracy, meritocracy, meritocracy.
There must be a level playing field of aspiration, brains and ability must be rewarded, aspirations must be funnelled and over-expectation given cold reality.
Comprehensives have resulted in many being under-educated and too many have gone on to do half-assed courses at third rate poly's and have ended up feeling hard done by when they cannot get a good job in the cold commercial world.
Further education is not a universal right, only those with proven ability should have that right. We need an educated intelligent elite to maintain our competitve edge on the worlds stage. Afterall you don't see the French ruining the standards at ENA, just so that all can attend, why do so at OxBridge.
To attract the working class we need to recognise that they exist, that they have rights and aspirations and we must allow these to permeate and be fulfilled if at all possible. We need to recognise that grammar schools benefited working class kids. We need to pour scorn on the dogma of the left that everyone should be brought to the same dismal standard.

[Angelo Basu]

There already is a derogation from the TEU right of freedom of movement for workers in respect of the 12 newest EU Member States. It is just that the UK (along with only Ireland and Sweden) decided not to exercise the derogation for the first 10 and has exercised it in a limited way (by putting on a quota) for the newest 2. Mass immigration from the EU15 wasn't really a significant issue (although perhaps the locals in the agricultural towns around the Wash would disagree as they did get a number of Portugese migrant workers).

Are many of the new immigrants buying houses? As most seem to have come to fill low paid jobs and are sending money back home I'd have thought they would have had most impact on the rental market. Or has this had an indirect impact on house prices because of landlords investing more in rental property due to increased demand? But has this actually had greater impact than eg the massive increase in student numbers creating a much larger rental market in university towns? The massive bonuses being paid in the City of London are also in my opinion likely to lead to house price inflation in the South East, both as the hard working recipients of those bonuses trade up the ladder themselves but also as they invest surpluses in buy to let property. If property prices (rental and ownership) rise too far this will itself put a brake on economic immigration as it will not longer be economically viable for migrants to come here to work as the cost of living would be too high to improve their position compared to their home countries.

It sits oddly with us as the Party that created the home owning democracy to argue that home ownership should be a privilege rather than a right!

[Esbonio]

As I understand the concept, a land value tax is a stupid idea with as much electoral traction as the poll tax.

It strikes me as quite simple. If we have a housing shortage we can increase supply or (more difficult) reduce demand. The increased demand for housing is attributable to a rising population (itself presumably attributable to an ageing poplulation and net inward immigration) combined with changed patterns of living (more single households).

If we wish to increase the supply of housing we must make more land available and the way to do that is to ease (not abolish) planning restrictions. The idea that we should instead tax people punitively from their homes for merely holding assets is distinctively illiberal. We have had enough of that treatment from a Labour chancellor.

[Andrew Woodman]

As we're throwing in all factors, am I alone in thinking that these house price rises stemed from banks changing the rules on 3 times the salary as a limit for a mortgage, and people falling out of love with the stock market for their investments and pensions (in no small way attributable to the Gordon Brown pension raid).

As stability is the keyword, I don't see what we can do to reverse this. Just something else to ponder.

[Graeme Archer]

A propos the points about immigration and house prices -- I don't understand how people who are renting accommodation that would probably otherwise house a tenth of the headcount, if any, could be having an effect on house prices. But the Guardian had an article last November which set out one rationale:

http://business.guardian.co.uk/story/0,,1954448,00.html

Here's the relevant bit:
This is not to say that Polish people have been turning up and buying houses, but they do affect housing demand by renting property. That has pushed up rents and rental yields and maintained the attraction of buy-to-let well beyond its sell-by date.

If the impact of Polish workers has been to have kept the buy-to-let market attractive (the article provides no evidence for this, by the way), then it remains unlikely to me that it is a key driver for the current difficulty that low-to-average earners have of getting onto the property ladder. I think the other subjects discussed on this thread are more likely to be "real".

[Graeme Archer]

I also don't understand why the Guardian writer finds buy-to-let a bad idea, if there is a market there demanding access to it? I thought one of the traditional problems for the UK Housing market has been the lack of privately owned rental properties?

[Mark Wadsworth]

Esbonio "The idea that we should instead tax people punitively from their homes for merely holding assets is distinctively illiberal".

Hang about here. If you own shares or have money in the bank, either the company is paying corporation tax or you are paying income tax. If you own paintings or valuable antiques then it is nobody's business and this should of course not be taxed (i.e. scrap IHT).

However owning land is not just owning land is it? It is benefitting (or not) from what the local community or local businesses or the taxpayer provides by way of schools, police, hospitals, street lighting, railways, roads etc. Instead of introducing user charges for the NHS, doubling fares on railways and making people pay each time they call the police (on an 0898 number), having LVT comes much to the same thing.

And the rate need not be punitive. It may come as a surprise to learn people who live in smaller homes in cheaper areas of the UK pay up to 3% of the value of their home in council tax (which should be replaced by proper LVT). So a 1% rate is far from punitive. And surely it encourages liquidity if you scrap Stamp Duty as well, somebody looking to buy a home doesn't have to pay up to 4% up front but 1% a year. And so on.

I suggest you read up what Adam Smith, Ricardo, Friedman, Fred Harrison, Samuel Brittan et al say about it first. Or indeed Winston Churchill who made the same point but more elegantly.

[Tory Loyalist]

Anybody care to explain why Master Gove's brilliant plan is so much better than the equity-sharing schemes familiar today?

I'll give you two reasons why it isn't

1) When part-owners come to sell their share there will be endless wrangling as to the division of open market value between land and "bricks and mortar". If their share is 50%, 25% etc of market value no such problems arise.

2) If values continue to rise it is the land element that is likely to soar rather than the "bricks and mortar" so this system will work against the part-owners.

A lot of rubbish is being talked about the effect of new housebuilding on prices. In fact the effect is minimal, as it will always be a drop in the ocean compared with the existing housing stock, the two being part of the same market.

Nor are we building today's executive homes (or even "affordable housing") for the homeless, who are likely to remain homeless. The best of these houses are being built for people who are invading the SE from other parts of the country for purely economic reasons. It would be far better for the country that they stayed put, and a lack of luxury housing for these internal economic migrants would be an extremely good thing.

I would guess much "affordable housing" goes to people who previously lived with their parents. Given that most families are having two or fewer children, many of these people will no doubt inherit homes one of these days. They'll just have to learn patience, just as I did when the manager of the local Abbey National told me to save for two years before applying for a mortgage.

The relaxed lending criteria of recent years has had a disastrous effect upon house prices. I see you can now march into the (Spanish owned) Abbey and demand five times your salary. Madness!

That continued immigration puts multifarious pressures on the lower end of the housing stock is obvious to anyone with intelligence above the level of an imbecile. It's one more reason why immigration should be reduced to a trickle.

Gove's plan amounts to just another Cameroon gimmick, and a desperate one at that.

[Tory Solicitor]

Angelo, I was thinking more of a permanent right to derogate on free movement of workers, each MS effectively deciding their own policy

I agree with contributors above that it is easy to exaggerate the impact of immigration on house prices.

But immigration does give rise to all sorts of housing peculiarities. I have heard that in Lambeth seasonal Portugese workers push themselves to the top of the social housing queue by pretending to be "homeless". The local authority has the money to check up on claims of homelessness by UK citizens but not on the claims of non-UK EU 'citizens'. Can anyone suggest a solution to that issue which is both legal and not costs prohibitive?

[Derek]

If we are to maintain a free market, it must be down to supply and demand. Andrew is right when he says that lenders are willing to lend more money these days, and we also have much lower interest rates which have been sustained for many years.

We must seriously reduce demand by restricting immigration, including within the EU. Unfortunately we can't as we have signed up to free movement of people. We must renegotiate the terms of our membership of the EU, or we are powerless to act.

[Esbonio]

Marl Wadsworth

I respect your opinion as I am sure you respect mine and I've thought hard about what I think is a stupid idea.

Your comparison with shares or money in the bank makes my point. Disregarding your reference to corporation tax (which a minor point not all companies pay), I pay income tax on dividends or interest. The government
does not apply a wealth tax on the basis of the value of my shares or my cash (but they would if they could, and if they did no doubt looney acolytres of Caeron might seek to out do it). I only pay CGT on the disposal of the asset. If you want to socialistically widen wealth taxes then at least be consistent and apply it across the board to all assets we own. Why on earth antiques etc should be exempt beats me but it is inconsistent.

I think we have had this argument before.

Tax should be related to ability to pay and I would rather pay more income tax than be forced to pay an inflated wealth tax; on that point even if one were to accept a tax based on a putative value it should be based on the potential yield.

Thanks for the same reading list; I read some of them at university; I then improved my knowledge with a further business degree and hands on expereience of economics and asset management working in the City.

PS

I never thought much of the FT. I seem to recall they were in favour of the ERM; the Sun however got it right. Don't believe everything you read.

[Mark Wadsworth]

Esbonio, it is not inconsistent at all.

You should get what you pay for and pay for what you get. If you've bought an antique, well it's yours, the value is inherent in the thing itself. If you own land, it is only the location that gives it value, and that location (shops, policing, roads etc) only has value because of the continuing efforts of others (or funding by the taxpayer generally).

If you are happy with income tax (a tax charged on individual efforts, i.e. a bad tax) then why are you so unhappy with people paying tax based on value or benefits that accrue to them at no personal effort whatsoever (of course we all hate paying tax, but LVT does not discourage work and the economy or the efficient use of available land, probably the reverse)?

That said, other property-value related taxes (council tax, SDLT, IHT, CGT) are truly awful taxes and should be scrapped.

[Esbonio]

Mark

We are obviously completely at cross purposes. I did not see you as an ideologue. Your extrinsic argument could be applied to anything including shares, antiques etc.

I reckon the only common ground between us is hopefully that we both believe in keeping the tax burden low. You however think income tax is bad when I see it as being easy to assess and related to ability to pay. (I do not see what is fair about having to pay a wealth tax for against an asset which is your home and over whose value you have no
control). If my house doubles in value but my income is static why should I pay more.

And since you raised the subject, FWIW my wife and I in common with many people we know get very little in the way of local services. The roads are rubbish, the police are almost non-existent, crime is on the up, and the only thing we feel we benefit from (refuse collection) is erratic. So to be frank I'd rather pay for the services I use direct. Now how about that for fundamentalism.

[Angelo Basu]

Tory Loyalist- I suspect that it would be easier to leave the EU entirely than to get the 27 state agreement that would be required for amendment of the Treaty to remove free movement of workers. As it is one of the fundamental pillars of the Treaty its removal would go to the heart of the original idea of the EU and therefore be far more of a challenge than even the views of those who say "we signed up to a Common Market not a Federal State".

As has been footnoted in the press coverage, Bulgarians and Romanians are, notwithstanding the derogation from free movement, still entitled to be self employed (due to the freedom of establishment and free movement of capital provisions in the Treaty). Removing the free movement of workers provision would lead to more reliance being placed on the other fundamental freedoms in the Treaty and amendment of these would basically involve the dismantling of the whole edifice.

[Mark Wadsworth]

Esbonio, I think we are also agreed that local services are pretty awful in most places, different topic. But an ideologue I am certainly not, I am a "what works" kind of guy with a bit of free-market economics thrown in for good measure.

[DavidTBreaker]

Immigration does push up prices due to increased demand, whether that is increased demand to buy or rent. Both are in effect the same market, as many have bought houses to rent to migrant workers and immigrants. The answer is to restrict immigration and maintain a stable UK population of approx 55 to 60 million. We should leave the EU anyway, so this isn't a problem. An ever increasing population is crazy, as we do not want to destroy the countryside, which is beautiful and needed for farming anyway.

Without any restrictions on building the free market in housing would be damaged, as the building of others could ruin your investment (http://chameleonsonbicycles.wordpress.com/2006/12/11/land-the-exception-to-my-free-market-rules/).

Another thing causing a "buy to let" boom is the government's higher education policy whereby more and more are attending university, and so renting property nearby. I support more people attending university, providing it's a worthwhile degree and/or they are paying, but attending an institution away from home is both more costly and affects the housing market. Why not franchise the degrees out, so students can study what they want at their nearest institution and commute from home? Then the govt wouldn't need to give accommodation grants or build such huge campus sites.

[Denis Cooper]

There are a number of factors which have now driven house prices up beyond the reach of many workers, which are almost all directly or indirectly connected with the unprecedented volume of immigration in recent years, and which will continue to operate if the government continues to allow and encourage mass immigration.

1. The rise in population is almost all down to immigration, and that is projected to continue indefinitely. Anybody who comes to this country will need some kind of roof over their head, and even if some are packed in ten to a house or living in sheds or caravans on farms others are not. Some of those packed in like that are in any case illegals, and are not recognised in any official analysis.

However the Chairman of the South East England Regional Assembly openly admitted that a third of the houses projected in the South East Plan would be needed to cope with the effects of immigration. When I went through the data in the background information on their website the conclusion was that the needs of the established population would be met by building about 19,000 new homes a year - only about 4,000 for the natural growth of the established population, and the rest to account for the trend to lower occupancy. That annual build rate has been exceeded for many years. So if the plan was to build 29,000 a year, the maximum which SEERA now say they want, about a third would only be needed to cope with immigration. If the CBI and other groups got their way and it was 36,000 plus each year, nearly half would be to cope with immigration.

2. Lower interest rates always tend to push up asset prices, including the price of property. The Bank of England has stated that it has been able to hold interest rates down partly because immigration has limited wage rises. Therefore, there is also that significant indirect effect of mass immigration on house prices.

3. Because many of the foreign workers can only afford to rent, or only want to rent, there's been a massive boom in the "buy-to-rent" market, which as I read has provided the best investment returns of all asset classes in recent years. Consequently house prices have become partly detached from the incomes of actual and potential owner-occupiers, and have instead become linked to the volume of accumulated capital available for speculative investment.

4. Because it's now too expensive to buy, many more young native workers are also forced to rent, supporting the returns of the "buy-to-rent" investors. This is why it's projected that the rate of owner-occupation will steadily decline.

The overall result is that the ratio between house prices and incomes is now at its highest level since the peak just after the war, exceeding the two major peaks which have occurred in between, see the chart in:

http://www.thebusinessonline.com/Document.aspx?id=E161BD4B-1844-497D-9A04-207B84C577A0

"House prices most overvalued since 1948"

It's difficult to see any way back which wouldn't involve a huge crash, and as the bubble has been and is being inflated primarily by the effects of mass immigration the government now has little choice but to keep that going and hope for the best.

[Richard]

I'm keen on the idea of LVT but it would have to be set at a low level so that it didn't severely shaft people. In the same way that people have to pay rent to a private landlord based on the value of their property, taxpayers would be paying "rent" to the government. Due to this replication of a common market mechanism, LVT is popular amongst many ultra free market libertarians.

http://www.landvaluetax.org/badtaxes.htm - this shows why other taxes damage economic efficiency in comparison to LVT

[Esbonio]

Richard

What do you call a "low level"? The vast majority of people will have to pay any such tax from their income unless they are forced to sell their house, a really potential vote winner that. And as we all know incomes have not kept up with property prices. Nominal incomes are up around 25% under NewLabour; during the same period I reckon some property prices have doubled or tripled.

[TomTom]

What will come is Capital Gains Tax on houses as in the USA.................probably VAT on house sales but none on renovation

[9votes]

Relax the planning rules in already developed areas of our cities. High density development works rather well in places like New York and Barcelona doesn't it?

[Esbonio]

Mark Wadsworth

I've just been rereading your July bit on LVT.
I'd forgotten it was for the Bow Group and that you are presumably a tax lawyer or tax accountant?

[TC]

House prices are high for a very simple reason - not enough supply to meet the demand. The reason for this is not a market failure, it is a government one. The planning system is far too restrictive and prevents market forces from working. Deregulate and things will sort themselves out.

People are worried about Britain being overcrowded, but there is no shortage of land - 90% of the population lives on less than 8% of the land. The problem is a planning system that prevents people from building.

Most of my life I have lived in the countryside and of course areas of beauty should be protected. But most of the countryside is now an extremely dull, intensively farmed monoculture. Why not build on it?

[matt wright]

I've long thought the planning laws in Britain are plain mad. We are trying to cram houses into areas drawn on a map by state planners. This seems very un-Tory to me and actually leads to the sort of large dense estates on green fields that most upsets people. As a party we should be looking at ways to free up planning law and switch the emphasis more to that of low density and highly dispersed housing. We should also make it easy for people in rural areas to build another 2 or 3 houses on a plot they own and for young people to build timber homes in open countryside. We should institute a presumption in favour of extensions and small developments on your own curtilage etc. Of course we can protect people from the extreme impacts of bad applications but that should be the main focus rather than petty bureaucracy. Lets make Britain a free mans country again - now that would be a Conservative value to be proud of,

Matt

[Esbonio]

Knock me down with a feather. Matt Wright has written something I agree with. I had better go and lie down.

[matt wright]

Esbonio, well maybe its the New Year. Seriously though I think because you interpret me as being too loyal to DC you have perhaps not properly listened to some of the things I have been saying. I think we all have to work harder and be more open-minded about what we are saying and how we go forward together and get rid of Labour. Just my thought for 2007,

Matt

[Jock Coats]

Liberal alert (though I crave your indulgence as a Chair of a CLT who has been trying to get to talk to Gove for a while now)...

Good on him. I thought he explained it quite clearly for a short radio spot. It's not new ground politically. CLTs have been a main plank of Lib Dem housing policy for nearly two years and through the Co-operative and Labour people in particular they have been needling away at the Labour Party.

A couple of things that people have mentioned perhaps bear explaining.

1. Arguments about the resale value are not an issue. How it works is kind of like a unit trust or share scheme where the value of units is tied to a locally pre-determined property price index Residents in a development actually become co-owners with all the others in a Mutual Home Ownership Society. The society takes on the post-development financing of the whole development, including, if necessary, some of the land cost if the "parent" CLT had to pay for the land. The residents effectively commit to a share of that gigantic corporate mortgage based on their household incomes, with the proviso that pretty well the balance of incomes in the development has got to be able to average out paying for the whole lot.

2. Certainly here we're not talking about "key workers" particularly, though no doubt many of the people usually so described would qualify for help through a CLT development.

3. 8 out of every 10 households currently not owning a home aspire to own one, and it seems likely from wage ratios and historic values that there ought to be a need for not much more than 20% of our housing stock at heavily subsidized social rent levels, so building more social housing for rent is not necessarily helping to meet the aspirations of many. Pace those who, wrongly in my opinion, say that people should not assume the absolute right to own their own home, The CLT/Mutual Home Ownership model offers an opportunity for people to get on a helper step towards the bottom rungs of the mainstream housing market. Additionally, instead of pouring money into a landlord's pockets they can maintain their investment and even hope to build a little equity. All on the condition, basically, that as their fortunes improve they take on more shares as people leave and are replaced by people who cannot affor as much, until the point that their outgoings under a CLT would be as high as their outgoings in the owner occupancy sector.

Where is the demand? In Oxfordshire, whatever people say about immigration numbers, 95% of emerging households are indigenous not just to the UK but to Oxfodshire itself. Most of the remainder are (usually higher value) refugees from London. It's really not inconceivable - in a decade one third of all households will have had at least one member grow up and be wanting to leave home and set up another household or are already grown up but unable to afford to move out.

At the same time some of the worst gentrification has ocurred in places where no immigration pressures directly affect that community - it's the influx of wealthy English that has made Cornwall the worst in the country on the affordability - wages/price ration - calculations.

And on the other hand this has meant that rural life in particular is becoming more and more exclusive which puts communities under pressure - not enough young parents can afford to live somewhere, the school closes or the bus service stops because it was mainly provided for the school run but was a lifeline to anyone without a car in the village. Nobody who can afford to live in such a village wants to take a part time job as a village shop assistant. And besides, you meet all your friends from the village at Waitrose fifteen miles away in your Chelsea tractor/Subaru every Saturday so do you worry about having a village shop?

CLTs offer a structure in which the community itself, say through a parish council, can maintain a long term influence over the use of some of the land in the village, whilst helping to meet its own need for providing accommodation for local people (not a problem from a legal point of view by the way so far as I can see).

Anyway - we'll see how it goes. I'm a bit irked that in one day Michael Gove has got more people talking about CLTs than my own dear Lib Dems have managed since adopting the policy two years ago, but I do hope DC can bring at least his Oxfordshire colleagues onside with this and help us get a development going somewhere!

Jock Coats, Chair, Oxfordshire CLT LImited

[matt wright]

Jock, this is useful, thanks. Just in relation to some aspects of your post, the wider issues of change in our rural areas is complex and not all negative. I can point to areas at different times, where "incomers" have helped to save places, although of course I take your points. "Gentrification" is also a very loaded word and really is not far removed from "regeneration" which is more PC. Surely if an area improves its value is bound to go up at some point and I don't think we really want an area to get worse. That said lets be honest there are places where Labour did want areas to stay a mess and not be "gentrified" because they perceived that if they did improve they might lose traditional working class voters. Sounds cynical but sadly very true,

Matt

[Downsize the NHS]

Hi

Undemocratic and unelected is the South East England Regional Assembly.

Get rid of it.

We the Conservatives of the SE want no more development. No more immigrants.

What is needed is rigid control to prevent degradation of ourbeautiful countryside and protection of our residential areas.

We need the Party to stand by its loyal supporters, many of whom live in the country, far from the squalor and left-wing extremism of cities. Conservatism breathes the health and vigour of the British countryside. Labour the foul breath of the cities.

Industry and new development should be moved to the north, where it is needed.

Migration Watch has shown net loss to Britain due to the effects of immigration. We need this to stop.

It's incredible that any member of the Conservative Party could support the extreme left policy of allowing alien immigration - the cause of overcrowding, house price rises, British workers losing jobs and now terrorism.

[Denis Cooper]

Jack Coates @ 00:23 -

"In Oxfordshire, whatever people say about immigration numbers, 95% of emerging households are indigenous not just to the UK but to Oxfodshire itself. Most of the remainder are (usually higher value) refugees from London."

Yes, Keith Mitchell tried to make a distinction between "immigration" into the South East Euro-Region a) from abroad and b) from other Euro-Regions in the UK. But the fact is that about a third of the proposed 29,000 new homes a year in the South East would only be needed to cope with the effects of immigration from abroad, whether the additional people were foreigners coming direct, foreigners who had first arrived in London and then after a few years moved out, or natives who got pushed out of London by the pressure of immigration into London from abroad - "refugees" as you put it. Stop the immigration from abroad into the UK and the number of new homes needed in the South East drops to 19,000 a year, which has been exceeded for many years now. Step up immigration to the levels demanded by business lobbies hungry for cheap labour and looking to profit from the construction and other work, and it becomes 36,000 plus a year.

If you work through the data in Table A1, "Migration to and from the South East" on page 14 of the South East Plan, you'll find that in round numbers for every five people who come from abroad and settle in London, two people will move out to the South East, while one will move on from the South East to another part of the UK, mainly the South West. In addition to that net gain of one person for every five who arrive in London, one person will come direct to the South East from abroad, even they arrive in Kent rather than Oxfordshire!

The direct and indirect inflows together add about 11,000 to the base demand of 19,000 new homes a year for the established population, which is why business lobbies and the government insist that 29,000 a year will not be enough, and it should be 32,000 or preferably 36,000 a year plus.

[Downsize the NHS]

Hi

No more development of rural and semi-rural areas in SE England!

Let that be the Tory warcry to the Tories who live in our beleaguered area.

No more expansion of London!

[Angelo Basu]

Yes, lets focus on London and the South East. A really good strategy for winning the next election and doing things which the rest of the country would vote for!

[Mark Wadsworth]

Angelo, I take it that was meant ironically and that you don't live in the South East?

[Tory Loyalist]

As far as I can see nobody has yet answered my question about this gimmick.

It was; in what sense is the proposed split between trust-owned land and resident-owned bricks-and-mortar superior to current shared equity schemes?

I can't see any advantage at all and I can see a number of disadvantages.

I've taken a look at our Liberal friend's website, though. Not very user-friendly, is it?

The problem with these Cameroon gimmicks is not simply that they are either wet, pink or barmy, which most of them are.

It's that most appear to have been purloined from some other bunch of lefties.

[Denis Cooper]

If we shut down all immigration and starting expelling illegals then several things would happen. The first would be a significant decline in the demand for housing, and a sharp fall in prices. Those who put their savings into "buy-to-let" in the expectation that the government would ensure a never-ending stream of new tenants would lose money, and those who borrowed heavily to invest would go bankrupt. The second would be a rise in wages, especially among the lower paid, which would induce the Bank of England to raise interest rates, pushing house prices down further and pushing more investors into bankrupty. Thirdly with a tighter labour market and rising wages international investors would look for other countries where labour was cheaper, and there would a drop in the inflow of capital and probably a fall in the pound, leading to further inflation owing to the rising prices of imports, and further interest rate rises. Fourthly it would take time to train our unemployed so they can replace the migrant labour, and as in the meantime tax revenues would probably be falling the government might be stretched even to cover the training costs while continuing to pay them benefits. Fifthly Brown has based his spending plans, including meeting PFI liabilities, on the assumption of constantly rising tax revenues from a constantly rising working population, so the government would start to run a massive budget deficit.

For these reasons it would not be possible to instantly reverse the policy of mass immigration; it would have to be done gradually, to try to achieve a soft landing.

Just like when we joined the ERM, our government has embarked upon a foolish, unsustainable course of action at the behest of big business, and the official opposition has gone along with it, and the longer it goes on the more perilous our position becomes, and we'll be lucky if we do escape without a smash.

[Jock Coats]

Tory loyalist wrote:

"It was; in what sense is the proposed split between trust-owned land and resident-owned bricks-and-mortar superior to current shared equity schemes?"

One major reason is that the housing remains affordable in perpetuity, or at least so long as the community needs it to be below market affordable. With many shared equity schemes, though they are now getting better at this, once you've bought your way out of the rented bit it becomes an open market home and you have to replace it as an affordable home if there is still the need. With CLTs even if someone leaves the scheme at the top end having improved their income and so on enough to buy in the open market, the housing is still available for people in need of assistance - it's not "lost" to the open market.

Current shared equity schemes, in the most overheated areas at least, are only affordable to the top 20% of household incomes currently priced out of the mainstream market. As a guide to what that means, in South Oxfordshire (mostly Boris's Henley constituency and the most expensive district in Oxfordshire) we're talking about people on incomes far in excess of that that would justify the massive subsidy of welfare housing - £12,000 for an average one bedroomed council property say, but below the £40,000 minimum that you would have to be earning to be able to get a mortgage on the smallest nastiest one bedroomed property for sale in the district.

Conventional shared ownership is really only affordable to those in the £32,000-£40,000 band, whereas CLTs can help people right across that £12,000-£40,000 intermediate market, taking pressure off the social market at the bottom end.

But thank you - nobody else seems to have had problems with our website. Would you care to be more constructive than that? We are, at present, as one colleague put it "trying to start a building society in your bedsit in your spare time" so I don't spend as much time as I might tinkering with the web site if I were a housing association employing a flunky to do so.

I have to say though that for the most part, whilst I only posted to hopefully clarify some of the issues, this whole discussion makes me remember why I am sure it will take a long time for anyone to get me to vote Tory. It *doesn't matter* if the current shortfall is created by immigration (if you look at the difference in the rate of building between the 70s and now I think it's obvious that immigration is not the main reason, but a backlog of unmet need owing to falling construction completions over such a long period) the sufferers are your kids, your families, your colleagues who cannot afford a home (in many cases to rent or to buy). So this "gimmick" (quite why something modelled after the national trust and the Garden City Movement is a "gimmick" I'm not clear, would be needed anyway and I for one am pleased that Gove and Cameron are taking it seriously.

The CPRE are also pretty much onside as CLTs present a way in which communities themselves, especially in rural areas, can meet their own needs locally, keep those communities vibrant and sustainable, instead of having higher and higher level planners suddenly deciding that Bicester or Didcot or some other community will have to take most of Oxfordshire's SERPlan allocation of new homes in one hit.

Just remember, a village of 500 homes is not a huge place, but its indigenous demand over the next decade will be around 150 homes, between people living longer and wanting to move out of the family home sooner. In most of the villages I visit, most of these will need to be subsidised in some shape or form to enable the people in the village to afford to compete for them.

[Denis Cooper]

Jock,

I can't say anything about a particular village, or villages in general, but I can say that the numbers you quote above simply do not square with the data used in the South East Plan for the South East as a whole.

You're projecting that indigenous growth alone would require an increase from 500 homes to 650 over the next decade, which is about 3% a year. But even allowing for a near doubling of demand through immigration, the highest rate envisaged in the South East Plan is about 1% a year over the next 20 years.

[Page 13, point 6.3.4, projects that the number of households will increase by between 724,000 and 866,000 during the period 2001/02 - 2026/27, which covers 25 years; taking the highest figure, that is 35,000 a year; dividing by the present number of households which is ca 3.4 million that is about 1% a year.]

Looked at from another direction, the projection is that the average number of persons per household will decline from 2.34 in 2001 to 2.15 in 2021. [Also on page 13, point 6.3.5] Whether this will turn out to be true or not must be open to question, but assuming that it is true then the interpolated numbers for 2006 and 2016 are about 2.29 and 2.20 respectively.

So the 500 homes in the village now would be occupied by about 1145 persons, and the 650 homes projected for 2016 would be occupied by about 1430 persons - a population increase of 25% over 10 years, or 2.2% a year compound.

Where will these extra people come from? 2.2% a year is a high rate of natural population increase, similar to some of the third world countries, and it's a very long time since the natural population growth rate in the UK was anywhere near that. In fact in recent years the growth in the population due to the excess of births over deaths has been about 0.1% a year or less.

There's something wrong here! Taking any small surplus of births over deaths, and assuming a continuation of the trend towards smaller households, then on the data from SEERA (and from what was the ODPM) the indigenous requirement for additional homes should be somewhere around 0.5% a year, and if the village of 500 homes is typical that would mean 2 or 3 new homes a year, not 15.

[Tory Loyalist]

Well I'm a member of the CPRE and the NT, and I can't quite see how your scheme remembles the latter. Are residents going to be required to allow hordes of rubberneckers to invade their homes every Sunday? Maybe they could offer some nice lines in tea-towels and chintzy teapots to help pay the mortgage?

Actually I don't entirely disagree with one aspect of what you are trying to achieve. I think Thatcher was right to break up the big council estates through RTB, but I have long believed that the small estates attached to rural villages should have been exempted from the scheme. Social housing was required in these areas and all that has happened is that the estates been sold on to yuppies.

However, whether we like it or not, your wish to sustain "vibrant communities" in villages which are fast becoming mere dormitories may be as doomed as the attempts of local shops to keep up with Tesco. Many building societies did in fact start their lives in the equivalent of a bedsit, but what was possible in 1857 may prove unviable in 2007

The "unmet need" that you are talking about is the shortfall in social housing. RTB is one of the main reasons for its demise.

Maybe "gimmick" applied to your trust (as opposed to Cameron who is a walking gimmick) was a bit unfair, but I still don't see that the bricks-and-mortar/land division is any more revolutionary than, say, 25%/75% of the entirety. Legally, buildings and land are a single entity.

What is different, is that you intend to keep your stock as social housing and you do not intend to part with it, or as some would have it, give the occupiers "freedom to own their own property and pass it to their children"

Strange as it may seem, I actually agree with you. 35 years experience of the Conservative Party tells me that most Tories probably wouldn't.

I wonder whether Cameron really agrees with you on this point. Indeed, I wonder if he even undertands it.

[Jock Coats]

Thanks for the response TL. I should perhaps not have referred to the NT per se, but the work of Octavia Hill and John Ruskin in Barmouth and so on.

I disagree with you on villages, clearly though. I personally think there's big change in the way we work just around the corner - with all pervasive ICT infrastructure enabling many more people to work remotely and whenever they want, to make educating smaller groups of people more viable again and so on. And given how many of us appear to desire some kind of rural life (even if it's a bit more nostalgia than reality) we do need to be able to protect families' and communities' capacity to take care of their own without being pushed out just because someone has grown tired of city life and can throw around more money than the locals.

Why is the CLT system revolutionary? Well, I think it's a bit wide of the mark to say that it's a "land/buildings" division. It's not really - you don't "buy the buildings" but not the land; you buy shares in the overall development based on what that development cost - which may include an element of land cost - and on what you can afford. There's no paying "rent" on the remainder. You are expected to buy up extra units as your income justifies it and when people sell up and move on but a lower income household comes in.

To Denis - I have absolutely no confidence in the figures used in SERPlan and its successors. They do not seem to bear much resemblance to the levels of need evident in some places. And I have even less confidence in the ways that data is compiled. I have never met a single person in our target market who has ever remotely been asked whether they consider themselves to be in housing need. The unmet demand is greater than the households that will emerge in the next few years, and this is part of the reason why it is not primarily caused by immigration - the problems now may be being exacerbated by immigration, though I still question quite how much but not so much the unmet historical demand.

But don't get this wrong. Neither we, nor Gove, are talking about a silver bullet to end all housing shortages. We're talking about specific solutions for specific communities that are willing to quantify their own needs and try to address them for themselves.

The whole thing cocks a snoop at the whole of the predict and provide planning system.

However, I want to end on one point unrelated to whether the need is addressed by CLTs or any other mechanism - this constant cry not to "destroy any more of our countryside". And this, I think, is key to where your "dear leader" is coming from - since it's the speech about "beauty" and housing back in spring last year that put us onto him over CLTs. We live on just 7% of the UK's land area and even at a low density of ten dwellings per acre (inconceivable in modern planning I'd suggest) we're talking about possibly using less than a half of one per cent of just the farming portion of the remainder. If we chose to live at the density of Hong Kong or New York we'd fit the population of the south east region onto the Isle of Wight and Southampton. Most of that countryside, at least in the bits of the country people tend to be talking about when they talk about overdevelopment/overcrowding is utterly man made.

Personally I think there are other and better solutions, which is why I am convinced by CLTs, but it is just plain wrong to say that meeting the housing need (even in the south east) will necessitate anything like "concreting over/destroying our countryside" - especially if I'm right in my hunch about how work patterns may change pretty soon. And it does nobody any favours to pretend that it will.

[Jock Coats]

"35 years experience of the Conservative Party tells me that most Tories probably wouldn't."

Just out of interest, when we held an event and invited all district and county councillors in Oxfordshire (370+ of them) only nine I think it was turned up. Four of those nine were Tory councillors. This was long before Cameron had even heard of the idea.

I think in rural areas this will play especially well. My job this weekend is to write to all the Tory group leaders on the Oxfordshire Districts and the County offering to come along and give them a private briefing on the idea and OCLT's place in it. I'll lay a dollar to a dime that they all want to hear from us.

[Tory Loyalist]

OK Jock. I take my hat off to you. You seem to have this all pretty well worked out.

If you can successfully retain social housing in rural villages then you will have achieved a great deal.

As regards Tory councillors in Oxon, I presume the vast majority are Tories anyway.

Forgive me for seeming cynical about my own party but I've never got close enough enough to any other party - even yours - to engender similar feelings.

[Denis Cooper]

Jock,

The numbers in the South East Plan have to be taken with a pinch of salt, not least because they're projecting ahead for 20 years. So I do take them with a pinch of salt. Similarly I'd accept that they're for the South East as a whole, and there will be wide variations in local needs.

Nevertheless, it was openly stated that:

"Over the next 20 years, the region's population will grow by 900,000 increasing the demand for homes and jobs. Two thirds of this need for homes will come from people already in the South East, rather than from people moving from elsewhere."

Which is correct for the lower figure of 29,000 new homes a year - two thirds for the established population, or 19,000 a year, and one third, or 10,000 a year, to cope with the effects of immigration. If the annual build rate was raised to 36,000 plus a year, as the CBI demands, then the split is roughly half for the established population, and half to cope with the effects of immigration.

This is also obvious from the forecast growth in the population, which works out at 0.5% a year, when the excess of births over deaths is more like 0.1% a year. As has been said elsewhere, at least 80% of the projected growth in the UK population is now attributable to immigration, and in fact when the government raised its projection for immigration SEERA had to raise its projection for the number of new homes which would be needed.

On the matter of the backlog of unmet demand, in fact by now there should be no backlog over the South East as a whole. According to the Figure H1 showing annual housing completions back to 1991/92, there has been no year when the number of completions has fallen below the ca 19,000 base demand for the established population, and there's been an average surplus of ca 6,000 a year, which means cumulatively ca 90,000 surplus over the last 15 years. The backlog should have been cleared, but it hasn't because that surplus has been more than used up by the effects of immigration over the last decade.

[Jock Coats]

Thanks for that Denis. Oxford too has met and indeed exceeded its Strategic Plan targets in both the last two strategic plan periods. Yet we know also that the plan targets were a load of bunkum.

Oxford City Council in the run up to the most recent and last Strategic Plan had a needs assessment survey carried out by Fordham which showed that still to address the backlog of affordable housing need would require about 1300 *net new affordable* homes per year for the next decade and the current demand would need 450 or so (all in addition to open market level housing needs). I have to say I disagree with their conclusion - you can't do a straight translation from housing need to planning need as 75% of those households are actually housed already in Oxford, just struggling with space or affordability. So if you build to meet their needs you leave empty bedspaces elsewhere and encourage net inward migration - something that has not been discussed or consulted on by either council. Yet both their local plan and the county's strategic plan only includes about a quarter of this. And, historically only about a quarter of the affordable target itself has been reached.

It also highlights the stupidity, which of course nobody in here needs reminding of I'm sure, of the regional system. It is not an acceptable alternative to someone who cannot afford to raise their young family near the grandparents in Chipping Norton to be told there's a surplus in Gillingham! That surplus might as well be in Glasgow.

Also, 1991/2 is not early enough. You'll see from the longer term completions that we peaked in about 1969 at over 400,000 homes per year in all tenures nationally that is. Crucially, half of those were in sub-market rate type tenures, either council or assoication. The rate of completions of private stock has remained quite stable since then, with an upward blip prior to the negative equity problems in the late eighties/early nineties. But of any kind of affordable dwellings it has fallen to a tiny trickle - less that one tenth of what was being produced under forty years ago. The Tories halted the overall decline in house building but not the decline in affordable house building. But since when did we start to go into household growth decline in 1969? We didn't and haven't yet. No government since statistics have been available have presided over fewer affordable housing completions than this Labour government.

Also, our housing stock is amongst the oldest in the OECD. Every house currently being built (and remember these are completions rather than new dwellings necessarily) needs to expect to stand for four thousand years before it will be in line for replacement at the current rate of replacement. The wide belts of suburban inter-war pebble-dash-and-hipped-roof-semi is getting old and dowdy. We need to be building another 100,000 a year just to replace failing stock (and which is another reason other than just demand in the wrong place why we now have 720,000 empty homes).

Anyway - the point is that the big benefit of CLTs is that they are not a finger in air predict and provide style regional mechanism, but a very local mechanism. Only communities that think they have a need need apply I guess. We help them to quantify that need and to look at ways of addressing it without having to pan-handle the regional housing board or whoever for subsidy. The housing is more appropriate to what most people want (80% aspire to buy) and local communities retain a long term interest so they don't give permission for something they think will help their own only to find that after one owner they're just as pricey as everywhere else in that community.

[Tory Loyalist]

I think we need to overcome this peculiar English idea that you must "own" your home. Other nations don't seem to have this problem, and of course inflation is making it a very real problem.

Unfortunately all the time property prices continue to inflate renters will suffer in comparison with mortgagors.

Anyway, rented social housing is a necessity. If it is to be encouraged the threat that any future government will continue to extend RTB must be removed.

Certainly I own my own home (and a number of others) but I am more wealthy thn the average citizen. All I see around me is a lot of people being encouraged to encumber themselves with a lifetime of debt.

[Jock Coats]

I'm not sure what is peculiarly English about it - though it does sometimes seem axiomatic. It is true that we have raced ahead since 1980 but even now, of the OECD, Australia, Belgium, Greece, Ireland, Italy, Norway, Portugal and Spain are ahead of us in home ownership. Italy, Portugal and Spain in particular have gone from behind our rate to well ahead of our rate since 1998.

There's really no physical or geographical reason why we can't. As I said previously, even to address the maximum 10 year need would consume less than half of one per cent of the 41,000,000 acres of agricultural land in the UK. Except of course like "full employment", "full owner-occupancy" is a myth - there always needs to be liquidity in the market.

As you say, there will always be a need for "welfare housing" as I prefer to call it, but the socially owned stock is already around 20% which ought to be about right - welfare housing should be there for about that same proportion of households who are below the (relative) poverty line of 60% of median household income for a period. So really, the current "crisis" despite all the scary headline figures like "average household cannot afford to buy in 93% of British towns and cities", is truly affecting only about 10% of households. And, whilst most of those aspire to buy at some point many of them would not be in a position to even if they could afford to - you know - people in education, short term jobs and just "not settled down yet". So there's always also going to be a need for unsubsidized less permanent tenures like renting.

CLTs do offer a sort of a hybrid, and one could imagine for example a network of CLTs offering some kind of reciprocity with others to enable people to move between areas without the associated costs of selling and buying again while still growing one's personal asset.

There again, many many people would not be as asset rich as (they feel) they are today if there were no surplus of demand, so it's a great wonder anyone is terribly concerned about that 10% of households!

[Denis Cooper]

One really has to look at this in the context of the demographics - ie, the natural growth rate of the population has fallen since the war, with the advent of more efficient contraception (and abortion) and the trend for more women to pursue careers (or at least jobs) rather than having children. I need to look out the figures in detail, and no doubt when this topic comes up again there'll be an opportunity to post them, but for the moment I'll compare the surplus of births over deaths in 1948 and 1998, per thousand of population:

1948 - births 18.1, deaths 11.1, relative annual population increase 0.70%

1998 - births 12.1, deaths 10.6, relative annual population increase 0.15%

(These are live births, and I've ignored infant mortality, but even by 1948 it had been reduced to low levels in the UK and was of little demographic significance.)

In most cases when children are born they will first of all live with their parents, and then say a couple of decades later they will want to form new households and so will need separate homes. The difference now is that between a third and a half of the projected demand for new homes over the next 20 years would not be for our children, but for the children of other people around the world.