Thread by @PositiveMoneyUK

⚡️LIVE⚡️

We're launching 'Banking on Property' now at a live event featuring @TulipSiddiq @kevinhollinrake @isha_zen @L__Macfarlane and @franboait.

We'll be live tweeting. Join the conversation using #HomesNotAssets.

@TulipSiddiq @kevinhollinrake @isha_zen @L__Macfarlane @franboait 1/ @franboait opens the panel discussion: today we’ve heard that this month UK house prices grew at the fastest annual pace since 2004.

Right here in London we’ve seen property acting like a bank account for oligarchs.

2/ @L__Macfarlane: we often hear that the housing affordability crisis is down to a lack of supply. Our report shows that isn't true - although there is a lack of genuinely affordable housing.

Prices have been driven up by policies that have incentivised investment in property.

3/ @L__Macfarlane: we also look at the expansion of mortgage credit and loose monetary policy including Quantitative Easing, which have fuelled demand.

We've seen a powerful feedback loop between policy changes, mortgage lending & rising prices.

4/ @isha_zen: we've seen inequality turbocharged.

Almost half of housing wealth in the UK is owned by the over-65s.

The median net property wealth of a Black African, Black Caribbean & other ethnic minority household -in the last decade was zero.

5/ @isha_zen: we outline a bold strategy to tackle house prices over 3 areas:

- An updated mandate for the Bank of England to tackle rising house prices
- Fairer approach to taxing land & property
- Renter protections & alternatives to home ownership

6/ @isha_zen: our polling shows there is appetite for bold reform.

A majority of homeowners (54%) British public and (57%) Londoners - would be happy if their own home did not rise in value in the next 10 years if it meant more affordable homes for those who don’t own property.

7/ @TulipSiddiq MP, Shadow City Minister: I recognise as an MP and a former councillor that the housing system is completely dysfunctional.

A lot of my constituents feel politicians across the board prioritise developers' profits, rather than building good affordable homes.

8/ @TulipSiddiq: ‘in my constituency the link between wages and housing costs has completely broken down in recent years’.

9/ @TulipSiddiq: A well functioning housing sector requires a functioning banking system.

Part of the solution has to be the government promoting a more diverse banking system, with less speculative housing investment which starves the productive economy.

10/ @TulipSiddiq: We need to move away from the false choice between homeownership and renting - by increasing high quality council and social homes - as well as making home ownership possible for primary homes, rather than landlords.

11/ @kevinhollinrake MP, Chair of @APPGbanking: we face affordability issues outside of London too - prices in my constituency are much too high.

We cant look at this through the supply lens only.

12/ @kevinhollinrake: We do believe in home ownership - there should be better options for affordable renting, social housing and affordable homes to purchase.

13/ @kevinhollinrake: The government is trying to reverse this trend of declining ownership, for instance through mortgage guarantees and 'first homes'.

14/ @kevinhollinrake: but we need to see further measures. We need a much better planning system & resourced planning department.

We need to invest more in affordable social housing and stop owners of multiple properties locking young people out of the housing market.

15/ @kevinhollinrake: the Bank of England proposal is an interesting one and has been seen in New Zealand.

Overall, we should diversify the banking ecosystem to make it more attractive for banks to lend to SMEs and promote financial inclusion - e.g. regional mutual banks.

16/ @isha_zen: another interesting finding from our polling is that 57% support higher taxes on wealth, such as capital gains tax, if the money raised was used to improve local services.

17/ @TulipSiddiq: we need to redefine 'affordable housing' and make sure it's linked to local incomes.

Most affordable housing isn't actually affordable.

There is a growing consensus that the tax system isn’t working - we need to tax unearned income.

18/ @kevinhollinrake: We all want the same outcome, but different ideas about how we get there.

On planning, we need a balance between councils & national government.

The diverse banking model proposal would be popular amongst Conservatives & is gaining traction.

19/ @L__Macfarlane: the housing market is different to other markets because most transactions are trading already existing homes, not new supply.

UK government's model suggests that even if 300k homes a year had been built since the 1990s, prices would only be 7% lower...

20/ @L__Macfarlane: ... there are good reasons to build different types of housing & expand affordable supply.

But we shouldn't pretend that new supply on its own will solve spiralling prices.

21/ @isha_zen: rent controls were seen in the UK for a substantial part of the 20th century, as well as in countries like Germany and the US.

With rents spiralling, we need rent controls to be back on the table.

22/ @kevinhollinrake: the housing market is unpredictable - who could have predicted that a pandemic would cause a price boom?

The free market has worked quite well in terms of the housing market generally. Rent controls would mean more institutional investment, less choice.

23/ @isha_zen: we saw the government during the pandemic using measures like mortgage guarantees and stamp duty holidays.

These don't benefit the worst off, or first time buyers - they increase inequality.

24/ @L__Macfarlane: currently homes are a primary store of people's wealth, and banks' balance sheets depend on house price growth. That's why we need a long term, strategic approach.

But to make housing affordable, we have to deal with wealth accumulation through housing.

25/ @franboait: thank you for all your brilliant questions, and let us know what you think of the report.

We need a people-powered movement, so find your local renters union! @LDNRentersUnion @ACORNunion.

Read the report here 👇

ENDS.

positivemoney.org/housing-report