In a Sky News interview (watch here) I gave yesterday, I commented on the need for a greater focus on an institution-backed private rented sector in areas like London and Manchester as a way of helping people find homes in urban areas.

This is already happening as politicians begin to embrace the PRS as a potential solution for people to live centrally without huge debt and as a way to generate different tranches of investment into housing.

Yet, for the declining majority of homeowners or would-be homeowners, this makes no difference to unaffordability in the short term.

The coalition has played a coy political game of taking responsibility for the cyclical upswing in the property market. But what’s rather ironic is that everyone’s blaming 13 month old help to buy for the long term housing crisis.

But what does the government do? Stay silent, admit it or just state the obvious and clarify, “Property is cyclical, we’ve lucked out on timing and it hasn’t made too much actual difference”? I think not.

According to the government, the vast majority of help to buy purchases have occurred outside of London and the South East and subsequently fall below the average UK house price.

This means the surging London market – up around 18% depending on whether you believe the ONS, Nationwide, Hometrack or other parties– has little to do with the scheme. (In reality, it probably has more to do with skyrocketing construction costs.)

By the government’s own admission, help to buy has supported 27,000 sales – but this is a tiny fraction (just 3%) of the 900,000 house sales over this period.

No market is shifted by 3% of transactions, with the average price of homes transacted through the scheme said to be £184,995 for the equity loan part and less than £150,000 for the mortgage guarantee, according to a government advisor today.

It adds that 93% of equity loan sales and 85% of mortgage guarantee sales are outside London and the South East.

So what to do, then? Well, it comes down to supply, as most school children have probably suggested, much less the dozens of government reports. If we had 100 homes for every white paper, green paper, consultation and review, we’d have no housing crisis.

One part of this relates to separating out the service element of housing which can be done by incentivizing the kind of large-scale rental model they have in the USA. This will be essential to reducing debt and securing new investment from institutions and other long-term investors comes in. It is a different model, one being pioneered by the likes of Essential Living (

The main barriers to development for everyone revolve around land and planning risk. Both of these things can be solved by the government. The analogy I made on Sky News was around the Olympics and how ministers clicked their fingers, waved goodbye to bureaucracy and built
substantial infrastructure in a relatively short space of time.

There’s no reason why ministers can’t do that, perhaps using public land and public funds to de-risk schemes and get them through planning in areas that are near to existing infrastructure with potential for jobs and education (i.e. not places like Ebbsleet on flood plains miles from
anywhere). This approach won’t be popular with everyone, since one person’s first time buy is a blight on another person’s house price. But we need to start thinking of bigger picture solutions to housing.

While local democracy is to be encouraged, anything of national or social significance cannot be left to the vested interests of poorly resourced local councils or politicians driven by their own re-election.

It’s time for fundamental change, not more words.