We need your support to keep TheyWorkForYou running and make sure people across the UK can continue to hold their elected representatives to account.Donate to our crowdfunder
The crux of the problem that we face, and which we have faced for many years, is the fact that we do not build enough homes. I can count on the fingers of one hand the number of times we have built enough homes to meet the formation of new households, whether that is the result of divorce or the fact that we lead more solitary lives with more solitary households. Perhaps migration features around the edges, but those are two quite major issues. That means that we have not built anywhere near enough houses. This is not a new phenomenon, as it is a generational issue.
Many social aspects have been touched on by other hon. Members, so I shall discuss the considerable economic damage caused by building too few homes. It exacerbates the north-south divide, and means that demand for land and housing is concentrated in the south-east and they become more expensive, which damages the mobility of labour. It also leads to boom and bust. The recession of the late 1980s and early 1990s was domestically driven, and was caused by the shock of interest rate rises to combat inflation caused by an asset bubble.
An asset bubble in housing skews the way in which people invest in other assets. We have a low propensity to save partly because of the housing asset bubble and the fact that it predominates in our personal finances. It drains money away from other assets, and interest rates are kept artificially low, because of the debt that comes with housing. That is why we have so few savings, and so little confidence in our pension system. The housing bubble asset also divides the generations, and we can see that acutely today—many of us will have seen it in our surgeries.
Owning a home is a great thing, and is a moral good that has raised the wealth and life chances of millions. Like many Conservative Members I am from a council house background. Without the property-owing democracy of the 1980s, I would not be standing in the Chamber today, such are the opportunities that have arisen in my lifetime for my family.