How would YOU fix the housing crisis? Take power from councillors and Nimbys, says mortgage expert Peter Stimson

Whether it’s unaffordable house prices, higher mortgage rates, soaring rents or increased levels of homelessness, the housing market appears to be stuck in a never-ending crisis.

There remains an insatiable appetite to buy property. Many of those who don’t own aspire to, and pour their life savings towards achieving it.

It is a dream that continues to move further out of reach for many, as the chronic under-supply of properties means house prices rise and rents increase.

Government interventions often appear to add fuel to the fire. Stamp duty holidays, Help to Buy, Right to Buy and other schemes were meant to help more people on to the ladder.

Can you fix it? Each month we are speaking to a property expert about the housing crisis

But while many of those initiatives were successful, they also had the effect of pushing up house prices further for those that came after.

Worst of all, homelessness is rising. More than 300,000 people are recorded as homeless in England, according to research by the charity Shelter.

In This is Money’s series, we speak to a property expert every month to ask them what is wrong with Britain’s housing market – and how they would fix it.

This month we spoke Peter Stimson, head of the product development team at lender MPowered Mortgages. His job involves creating new mortgage products and setting the pricing for all of its residential mortgages.

How would you fix the housing market?

Peter Stimson replies: The answer is straightforward, we need more housing.

Government schemes such as Help to Buy, shared ownership and shared equity have been relatively unsuccessful in making a real difference to solving the home ownership problem we have in this country.

Trying to getting people on the housing ladder when there is a fundamental lack of supply, ultimately drives up house prices making housing even less affordable in the long term.

We have to start by acknowledging that we have a broken planning system that simply is incapable of delivering the level of housing that we need.

Peter Stimson, head of the product development team at MPowered Mortgages, says we need more housing stock and that starts by acknowledging the ‘broken’ planning system

Year upon year we consistently fail to hit anything like a reasonable level of new housing.

The Centre for Cities estimates we currently have a backlog of 4.3million homes that are missing from the national housing market due to our inability to build to the required numbers over the last 30 years.

Ultimately, tackling the problem means building 442,000 homes per year over the next 25 years, or 654,000 per year over the next decade, in England alone.

Even if you don’t quite subscribe to these numbers, the evidence that we aren’t building enough homes and haven’t for years is overwhelming and numbers have to go up substantially to address the fundamental supply and demand imbalance.

Why hasn’t Government addressed planning issues?

The Government did attempt to reform the planning system through its white paper ‘Planning for the Future’, which was published in 2020.

It  focused on streamlining and modernising processes and importantly, ensuring more land is available for development where it is needed.

” The UK should lead by the French example and have clearly defined rules around house building, so you know what you can build and where”

However, the Government canned this idea when it realised the extent of the opposition it faced in the shires and home counties and realised how many seats it could lose.

And let’s not forget that Labour opposed most of the reforms in the ‘Planning for the Future’ initiative, too.

We are therefore still left with the 1947 Town and Country Planning legislation, a set of rules enacted nearly 80 years ago.

As well as devolving planning powers to unitary local authorities, England and Wales remains the only place in the world where planning is ‘discretionary’.

In countries like France for example, there are clearly defined rules around house building, so you know what you can build and where.

In my view, the UK should lead by the French example and adopt a similar approach, rather than relying on the discretion of local authorities to grant such permissions where Nimbys (‘not in my back yard’) and councillors elected on ‘stop development’ mandates can prevent housing being built.

Housing shortage: The Centre for Cities estimates we currently have a backlog of 4.3million homes that are missing from the national housing market

At the end of the day, we can’t keep kicking the can down the road. We have the most expensive housing in Western Europe for a reason and it’s not something to be proud of.

If we really want to resolve this lack of housing stock issue then there needs to be a cross party initiative focused on reforming the planning system.

Does more supply make housing more affordable?

Put simply, yes of course – although we need to build in locations where there is demand.

Stagnant supply, together with surging demand, particularly in desirable cities such as London, Cambridge and Oxford puts upward pressure on prices.

It doesn’t take a genius to come to the conclusion that if we have more housing in such areas, this will help control house prices and at least give the next generations a chance of owning their own homes.

Building new homes will also be a great boost to the construction industry and economy in general, supporting thousands of jobs, as well as saving the Government and taxpayer money over the longer term.

The solution is obvious. We now just need some politicians with the gumption to tackle a 30-year problem.