Kate Barker – Government need to Aquire Land for New Towns and Urban Extensions


One of Britain’s leading housing experts has issued a grave warning about the national housing crisis, claiming that current policies are more likely to exacerbate inequality and homelessness than solve the problem.

In a damning assessment of policy, economist Dame Kate Barker has urged the Government to come up with new policies to help buyers and renters or there will never be enough houses built to keep prices down, she said.

Dame Kate’s wrote a highly influential report in 2004 while a member of the Bank of England’s Monetary Policy Committee, which has set the tone for house-building targets ever since.

Her report found that 233,000 to 285,000 new houses would be needed in England each year, depending how much the Government wanted to slow down house price growth. If the trends continue, inequality will grow and more people will become homeless, she said, stressing the need for improved standards in the rental market to help those who cannot afford to buy a property.

Last week, at the Tory party conference, Theresa May pledged to make money available to build new social housing. Dame Kate welcome the move but said far more money was needed.

“If you look back at the work that I did, it tells you we need an enormous amount of supply to bring prices down – far beyond what we’re likely to do. So that is clearly not going to be effective on its own,” Dame Kate said. “The things that are likely to bring prices down relative to incomes are much much more likely to be economic difficulties, or changes in interest rates so that people couldn’t afford so much.”

Alternative policies are needed to improve the functioning of the housing market and to make sure people have access to decent quality homes. “We shouldn’t kid ourselves we can get supply up quickly,” she said.

She called for tougher standards to force any bad landlords to raise the quality of the properties they let out.ame Kate added that she supports the tax changes which reduce returns for buy-to-let owners, “shifting the balance” in favour of would-be owner occupiers. But she still does want more action on supply of new homes, even it it will not hit her targets from 2004.

“The real question is whether or not the Government is prepared to be more interventionist in the land market, in terms of acquiring land for new towns or big urban extensions,” she said.

“The trouble is it is quite hard to find good ways to fund that that don’t affect the government’s finances.”

She cautioned against relying on numbers she calculated 13 years ago. “I’m amazed people still use my numbers,” said Dame Kate, now a non-executive director for house-builder Taylor Wimpey. “Sometimes I think I’ve been responsible for a narrative which makes supply too important [in the debate]”.

Population growth has been higher than she expected while income growth has been lower. If she updated the numbers to account for this, the figure would still come in at around 240,000 homes per year.

“Supply is important but things do change. One of the reasons household supply has been very tight for the past decade is because we have had very strong net migration – it would be ludicrous to deny it – and if that changes it will change the balance between supply and demand.”