Land Purchase Act – The Property Chronicle
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Land Purchase Act The winning entry from the 2018 Richard Koch Breakthrough Prize

The Guest Essay

Summary

Free market ideals should not be limited to esoteric debates about what could be achieved in theory. Indeed, competition, decentralisation, accountability and choice can solve the biggest challenges of our time. The cost and inaccessibility of housing are among the greatest challenges of British public policy beyond Brexit, yet successive governments have acquiesced to special interests and offered short-term gimmicks instead of radical change.

A free market in housing can be that disruptive force that democratises homeownership for those who had given up hope. Despite the need to address deep-seated issues in housing however, free markets thinkers need to also create policies that are bold, popular but politically possible, especially given the wide-ranging free market movement this could start.

This essay proposes the “Land Purchase Act”: a market-based policy that centres on how public land can be used to help disadvantaged people acquire housing. And not simply the type of housing that bureaucrats and central planners think people should live in. Instead, people should be given the opportunity to live in the houses that they want and are attractive. We can create a new generation of homeowners and fundamentally rewrite the policymaking landscape in housing.

Introduction

We have a unique advantage of being too disorganised to block the future. An opportunity to rethink, from the ground up, our approach to housing; a paradigm shift that ends the short-term gimmicks and authority of bureaucrats. The chance to offer people a radical, market-based solution to housing and the prospect of homeownership. Free market approaches to housing are, moreover, the only way to ensure people acquire the housing they want, rather than bureaucrats deciding what is best for people. We can start a movement that dispels the notion that market-based solutions have no place in housing.
This essay applies free market principles to address the shortage and unaffordability of housing, and outlines how the government can use the equity it has in land to help people on to the housing ladder. The “Land Purchase Act”, proposed in this essay, also outlines how people can live in the homes that they want. This policy has the power to act as the initial step in restoring social mobility in the UK, and encouraging the will of the people for more free market ideas to follow.

The remainder of this essay is structured as follows. In the first section, the problems afflicting the housing market are fully outlined – both the problems themselves and how the free market in housing has been thwarted. The following section introduces the policy and how it achieves two objectives: increases the amount of land made available and number of homeowners in the UK. In the final section, the economic benefits of the policy initiative and a free market vision for housing are elucidated. The “Land Purchase Act” policy, this essay will conclude, is the key to a new era of economic progress: one that provides hope to a new generation of homeowners – and in particular those whom are yet to experience the liberating powers of the free market.

Housing costs in the UK are among the highest in the world, both in absolute terms and relative to average incomes. The UK’s population has also grown considerably in recent decades. Between 1990 and 2015, the UK’s immigrant population increased from 3.7 million to 8.5 million.(1) However, while the country’s population has grown and increased the demand for housing, there has not been a commensurate increase in housebuilding in the UK. Inaccessibility to housing is linked to poverty and, more importantly, stands in the way of letting people see their children and grandchildren become property owners. Even those previously resistant to more housebuilding have become aware that the ever-increasing cost of buying a home is detrimental to society. People want to own their own homes and the government should not stand in the way of this natural ambition. In summary, we need to build more and lower the price of housing.

Despite the large backlog of homes that need to be built, planning permissions and the conceptions of central planners such as tower blocks have not delivered the homes that people actually want and are attractive. Allowing the free market to work is what will make homes attractive and, crucially, give people choice when it comes to housing. Why is it currently that people cannot acquire the homes that they want? Because you have to build what the central planners want, which has led to homes being built that nobody wants and miss out on the exciting vision that a free market in housing can offer. The deep-seated issues in housing can be explained by how political intervention has obstructed the free market.

Free markets thwarted






The Guest Essay

About Ben Clements

Ben works as an analyst for an intelligence firm in London and is responsible for helping clients understand the business, political and security risks to their operations across the Asia-Pacific region. He graduated from the University of Manchester in 2016 after reading for a degree in Chinese and Japanese.

Articles by Ben Clements

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