The recent Rent to Buy proposal, whereby tenants would rent a property for five years with the option to buy it at a discount at the end, shows that there are creative ways to tackle undersupply on the market.
Sajid Javid envisions that a Rent to Buy scheme, backed by the government through a £100bn fund, will increase confidence in demand and add to supply. Yet concerted action must come from all sections of the housing market to solve the issues that have plagued the market for years.
We need to deliver more homes but we must get it right. Both the public and the private sectors need to roll their sleeves up and deliver enough homes to dent affordability. Lasting partnerships need to be created to build new homes, as well as to regenerate and increase the density of existing stock.
This will mean bringing forward public land for development, as well as arming councils with the resources to satisfy their local housing needs.
Satisfying those needs isn’t just about building affordable homes - it is also about building communities, which requires cross-collaboration across the entire industry.
Javid’s proposal is testimony to the government’s understanding that renting in perpetuity isn’t the ideal outcome for most Brits. But renting for five years at a time of falling real wages and creeping inflation may dramatically reduce people’s ability to eventually buy a home.
It is dependent on sufficient discount over the rental term and a competitive mortgage offer. It also may not work in London, where house prices are out of reach for many families.
This change in direction on housing policy is long overdue, but is welcome nonetheless. The Tories know they must get housing right if they are to survive. They are still sailing against the wind, but if they can deliver 300,000 houses a year, they might just stay afloat.
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