A housing market that works - the PricedOut Manifesto

PricedOut believes that ordinary working people should be able to afford to buy a good quality home wherever they are in the UK.

Our manifesto is a comprehensive package of measures that will address the root causes of today’s sky-high house prices and bring stability and affordability to the UK housing market.

We need:

  • A government target of zero house price inflation
  • A major housebuilding programme, focussed on areas that need new homes the most
  • An end to incentives which encourage speculation in house prices and put first-time buyers at a disadvantage in the market
  • Improved tenants’ rights to ensure private rented housing is an acceptable place to live

Sign up to our manifesto by signing our petition.

1. End house price inflation

The government should aim to keep house prices stable with as little inflation as possible.

By making sure house prices don’t rise, wages will have a chance to catch up. With zero house price inflation, within a decade 1.15 million more people will be able to buy a home than can right now. If the government delays in any way, then we will sink deeper into crisis and it will take longer to get out.

A government target of zero house price inflation will act as a trigger for additional action on stemming house prices whenever the statistics show prices are creeping upwards. It will also send a signal to speculators that the government will not tolerate rising house prices – dissuading them from entering the market and giving people who want a house to live in a chance of buying at an affordable price.

Read more about our house price target here.

2. Build 300,000 homes a year

Every year, 250,000 new households are created as young people leave home and older people live longer. That means we need 250,000 new houses to be built per year, but because there has been a shortfall, we need to play catch-up.

Building triple the number of houses we currently do means the construction sector has to pull out all the stops. We need to:

  • Build on brownfield land AND greenfield land, including on existing green beltMuch of the green belt is not aesthetically valuable and prevents people from living close to where they work. Cities like London and Oxford could be the engine of the country’s growth but many young people cannot afford to settle there.

  • Support self-build and smaller builders – the construction industry is currently concentrated in too few hands, which means that consumers don’t benefit from healthy market competition. The government should ensure that smaller builders have the opportunity to benefit from public investment, and provide incentives such as cheaper land to people who want to contract their own builder to put up their house.

  • Allow local authorities to borrow to build – investing in social housing will allow more people to escape the private rented sector and push rents down, which will also help the government save money on housing benefit. In addition, councils that build houses face having to sell them at a loss because of massive discounts they are forced to give under Right to Buy. The scheme needs to be reformed in order to give councils a reason to build.

  • Build houses that people wantQuantity doesn’t mean a reduction in quality. We currently build the smallest houses in the western world and local communities resist development they fear will be an eyesore. However if local planning consultations actively engaged with the people who will live in new houses as well as the existing community, resulting developments can garner public support.

3. Reform the property tax system

People who benefit from rising house prices have done nothing to earn it. In many cases they have benefited from renters who work for a living making their property’s location a nice place to live. The tenants get nothing in return except higher rents. It is about time we started taxing property wealth in order to treat houses as a place to live and work as the best way to make a living.

  • A higher rate of capital gains tax on property – investors currently pay capital gains tax on homes that aren’t their primary residence (foreign investors will only start paying it on properties bought after 2015). For most landlords, the reason they own properties for rent is to make capital gain. They would be less inclined to enter the market and price out first-time buyers if they had to pay a higher rate of capital gains tax.

  • Revaluation of council tax – council tax bands haven’t been updated for two decades, while at the same time house prices have quadrupled, meaning owners of very expensive houses do not pay tax that reflects this. We now have a perverse situation where someone living in a modest house in Bradford is paying more council tax than a multimillionaire in Kensington.

  • Scrap Mortgage Interest Relief At Source (MIRAS) for landlords – buy-to-let landlords qualify for tax relief on their mortgage interest – unlike home owners – which means that they make more money from investing in the housing market, at the expense of people who want to buy a house to live in.

  • Punitive rates of council tax on empty properties – In many parts of the country, investors buy property and don’t even let it out, making money just on the increase in value. While councils are currently able to levy double the rate of council tax on empty properties, this is still a drop in the ocean for multimillionaire owners. Councils should be allowed to levy whatever they like on empty properties.

4. Improve tenants' rights

Private rented housing is not a choice. Tenants are insecure, paying inflated rents because there is no escape, and suffer poor conditions in neglected properties. By strengthening tenants’ rights, conditions in the sector will improve to the extent that renting will become a genuine choice – and people will not feel desperate to own, thereby limiting pressure on house prices.

  • Impose longer term contracts – tenants need more stability, so five-year tenancies should be the default practice, with limited rent increases and the option for the tenant to end the contract early if they have to move for work. This would benefit many landlords who would prefer to keep reliable tenants who look after the property and pay rent on time. While some landlords may like the ability to sell at any point, they need to start understanding that their property is their tenants’ home, not a financial plaything – if they’re serious about being a supplier to the rental market, they should be in it for the long term.

  • Ban letting agent fees charged to tenants – letting agents receive a large cut of the rent from the landlord, so there is really no reason for them to extract more money from tenants. Tenants face one-off costs of hundreds of pounds every time they move in to a new home, putting serious strain on their finances. Without the threat of letting agent fees, tenants would be more willing to use the option of moving to bargain rent down.

  • Abolish no-fault eviction – tenants can be given two months’ notice to move out by their landlord for no reason. This puts many off asking for improvements or maintenance for fear of being evicted in retaliation. Many landlords are helpful and professional, but with 35% of private rented houses failing decency standards, it’s clear that many tenants feel unable to complain.

Finally, the government should also appoint a Cabinet Minister with responsibility for Housing, and end the Help to Buy mortgage guarantee scheme as soon as possible.