Six property commentators - six policy ideas to ‘cool the housing market’.
Build more social housing
Raise interest rates
Refrom the rental market (longer tenancies)
Liberalise planning process
Reform property taxation (replace stamp duty & council tax with a land value tax)
I remember coming across a business management model called the The McKinsey 7S Framework...don't worry, I won't stray too far off topic here 😉
The model addresses seven aspects of running a business and lists them all starting with the letter S, hence the name. They are structure, systems, style, staff, skills, strategy & shared values. I will not go any further here apart from saying that in applying the model to changing a business it was clear that you could not change any single aspect in isolation of addressing the others at the same time. You cannot change systems without looking at staff and skills for example is the point. Now of course, this was a great 'upselling' tool employed by one of the most prominent management consultancies in the world - but it also happens to be true!
Therefore, my point here is that if we (well actually they, being the policy makers) try to make any form of policy change with any one of these policies (or a combination), that there will be a knock on effect, or consequence elsewhere.
Take for example, ‘build more social homes’. If we are to build more social homes then one way is to allow local authorities to borrow more money. More local authorities borrowing more money also increases the national debt. Increasing the national debt also has consequences in terms of interest payments, risk ratings, currency valuations, interest rates and such like. These are all factors outside of the intended fix of the policy - more affordable houses to live in - but it does raise the issues of complexity, consequences and inter-dependency of policy implementation - intended or otherwise. Who would be a policy-maker I wonder?
I have no wish to write a full expose on each of the suggested policies presented but I will finish by making two key points here.
The first is to reiterate that any changes to housing policy do not take place in isolation and there will definitely be knock-on effects and consequences associated with any given change. Some of these consequences will be beneficial, whilst others will not be...and beneficial is a matter of opinion by the way.
The second is merely to act as a flag to the types of thoughts on policy change that are 'out there' right now. A signpost of what might come if you like.
Today is not going to be 'judgement day' for these policy ideas, however judgement day may not be too far away either...especially with election manifestos around the corner. Oh and one final thought – policies are not always logical or fair or even that well thought out when there are votes and power at stake…we shall see.