What Price Affordability?
A key battleground at the forthcoming General Election is likely to be affordable housing. Expect politicians to be seeking to outbid each other with promises about how many affordable homes their parties will build in the next Parliament. All very laudable, but this argument somewhat misses the point.
When politicians talk about affordable housing, what they are really on about is social rented housing. This is of course an important sector of our housing stock, and provides a vital safety net for millions of people who might not otherwise be able to find a home.
But my point is this: shouldn’t we be aiming to make housing affordable for everyone, not just those who have waited months to climb the over-subscribed local authority housing lists? Perhaps if we made all housing genuinely affordable, such waiting lists would not be needed.
The politicians who make election-time boasts about affordable housing are the same people who repeatedly put in place policies which make building new homes (the only real solution to the imbalance between demand and supply) considerably more expensive. And this extra cost can only be borne by one group – the house buyer, for whom affordability is a major issue.
We have been doing some rough calculations in the office, and we reckon that all the extra regulations which have been put in place over the last 30 years – Building Regs, NHBC requirements, health & safety rules, site welfare requirements, COSHH and other enhanced infrastructure regulation – have added between 40 and 50 per cent to the cost of a new house.
Of course, it is difficult to argue with any of these initiatives individually (well, maybe one or two, but let’s leave that for another day), and the net result has been that new homes are built to a higher quality and better specification than ever before. But all this does come at a cost to affordability, and this cost impacts right across the market.
Mind you, it’s not just the price of the home in the first place which affects affordability: how much it costs to run, and in particular energy costs, play an increasingly large part in whether people can afford to live in any given home. We have been including energy-efficient features such as solar photovoltaic panels and very high insulation levels in the houses we build for some time, and buyers know that these are important when calculating the affordability of the home.
But my main point is this: we must stop thinking of affordability of housing as purely being about social rented housing. Whilst we rightly demand better standards in new homes, we have to recognize that this does come at a cost to the homeowner.
Perhaps it’s time we started reflecting this in the level of stamp duty – and even council tax - charged on more sustainable homes. We already charge less road tax on energy-efficient cars; could we not come up with something similar for those prepared to invest in living in more sustainable homes?