Libertarian solutions to the housing crisis

According to government data published on the 27th February 2015, the number of households in the UK will increase by an average of over 215,000 per annum between 2017 and 2027. However, in 2014 only a mere 118,750 new homes were actually built. As the supply of new housing in the UK is not meeting the levels of demand, house prices are increasing so rapidly that consumers simply cannot afford to keep up.

The fact that 13,850 additional households moved into the ‘unhoused’ category in the second quarter of 2015 is an extremely sad indication of the current national trend towards an increase in the number of homeless people in the UK.

In its broadest sense, libertarianism champions individual liberty as the ultimate political objective. The self-ownership of private property helps to empower individuals in order to enhance personal freedom. This means if we are to encourage the creation of a more libertarian society, we must make more progress as a nation on removing the barriers to private home-ownership for UK citizens.

Although the Conservative government has taken a significant number of positive steps to help address this key issue, there is much more that needs to be done if we are to solve the housing crisis in order to encourage increased private home ownership in the UK.

Libertarian ideas could play a key role in solving this problem sustainably. This is at least partially because much of the reason why insufficient quantities of homes are being constructed is that urban planning is massively overregulated in the UK. The planning policies of district councils are often hideously complicated, often being many hundreds of pages in length.

To take one example, planning permission is presently required for all sorts of minor developments ranging from new signage through to small home extensions and garage conversions. It should come as no surprise that our planning system is, in the words of the Home Builders Federation; “still far too slow, bureaucratic, and expensive”.

As libertarians, we are committed to individual autonomy. To me, this means taking whatever reasonable measures we can to roll back the overreach of the state in all policy areas. Any libertarian solution to the UK’s housing crisis must put forward wide-reaching initiatives to both simplify all aspects of legitimate planning policy, and to remove unnecessary authoritarian planning regulations that stand in the way of much-needed housing development.

One of the main regulative impediments to British housebuilding is the existence of green belts. These development control policies were first introduced in the 1947 Town and Country Planning Act in order to prevent urban sprawl, preserve the setting and special character of historic towns, and encourage the use of encased derelict urban land.

However, by enforcing these artificial barriers to growth around major urban areas, the government has ended up spatially constraining the supply of new homes in major urban areas like Greater London (where the demand for new homes is highest).

Additionally, the unintentional encouragement of large scale development beyond the outer boundaries of green belts has led to an ironic increase in commuting distances in parts of South East England surrounding the 514,060 ha Metropolitan Green Belt; which is hardly conducive to enhancing rural settings. Resultantly, it seems clear to me that all green belts will have to be phased out if we are to encourage the development of the quantity of new housing that we need in the UK.

It should however be considered that the abolition of UK green belts would be very difficult to implement politically. 64% of respondents to a 2015 Ipsos MORI poll believe that the green belt should be protected; therefore it is clear that there is public appetite for the realisation of at least some of the aims of green belts. This means that if we are to abolish green belts, we should search for better alternative policies that are conducive to their original aims.

One of these policies could be the replacement of council tax and stamp duty land tax (SDLT) with a new and simpler land value tax (LVT) on the unimproved value of all UK land. As derelict land in close proximity to urban infrastructure such as roads and railways is more valuable than Greenfield land with little nearby infrastructure, the redevelopment of poorly-utilised inner city land by its owners over new Greenfield sites would be encouraged by the LVT.

Consequently, the LVT would significantly assist in the prevention of undesired urban sprawl and the preservation of rural settings; making its introduction an effective replacement to green belts.

The elimination of SDLT would help to stimulate the UK property market; something that will need to occur if we are to encourage more housing development in the UK. Another added bonus is that the LVT would be very difficult to evade. This is because British land cannot be physically moved beyond the jurisdiction of UK tax authorities.

I hope that some of the ideas I have discussed in this article will provoke further thought on the subject of urban development. I welcome any comments below on the topic.

Cllr. Alex Curtis  (Ware Christchurch), Vice-Chair Ware Conservatives and NPSG, Libertarian & Localist