Left-leaning think-tank says government is giving developers a free ride

The government’s housing strategy does not do enough to reform the development industry and will fail to produce the homes the country needs without further measures, according to a leading think tank.

A report published today by the Institute of Public Policy Research says that the government needs urgently to reform the industry in order to prevent it prioritising the trading of land above the building of new homes.

In addition, the report, called We Must fix It, finds that consolidation of major housebuilders has led to a lack of competition and a virtual “oligopoly” amongst developers.

The report says the government’s recently published housing strategy will not work as it offers developers access to public land without doing enough to force them to actually build homes at the rate required.

It says: “The government’s new Housing Strategy does not demand the reform that is needed. Instead, it offers the major housebuilders public land, money and guarantees without articulating a serious quid pro quo. The result, as things stand, is likely, as in the past, to be subsidised stagnation.

It adds: “If we want a can-do supply-side response, government must demand more bang for the taxpayer’s buck.”

The report finds that the solution to problem is to encourage new entrants in to the market, force disclosure of land sales, and require low profit margins and fast build-out of homes on public land.