How can we really tackle the housing crisis?

From increasing credit to unhelpful side-shows like the extensions debacle, it's clear the Government needs new ideas on housing. So what should they do?

Six in 10 working families could not afford more than one month’s rent if they were made redundant

The Government has rightly made house building one of its top priorities. The problem is the Coalition isn’t being entirely clear about the problem or the solution. Some individual ministers and civil servants grasp that the current system is not working. But there is no reforming direction or narrative. There is only a muddle.

Firstly, the argument that the housing crisis can be solved by increasing credit is simply false. New mortgage lending doubled from 2001 to 2008. Home ownership fell from 71 per cent to 68 per cent. The amount of new housing space created each year remained the same. Understandable specific concerns about first time buyers lending can be partially and more safely dealt with by changing banking regulations.

Secondly, promises to give more power to local people are at best half-fulfilled. Planning inspectors remain able to override local councils. Local people and new homes must comply with huge levels of regulation and local council bureaucrat diktats. So local people have little to no say over how new development looks in their area.

Finally, there are unnecessary and unhelpful side-shows like the extensions debacle last week, which stripped immediate neighbours of their powers to object to major changes next door, and which even most supporters of planning liberalisation felt went too far.

This muddle is simply not working. So what should the Government do instead?

Firstly, they are right to focus on planning. Only 10 per cent of England has actually been built on. The idea we are about to run out of land is laughable. But just because only a little of England is developed doesn’t make ugly development acceptable. Politicians need to realise local people must be brought onside. If each reform was judged against this template, much could be done in two years.

To start with neighbourhood plans can continue to be strengthened. Local people should easily be able to amend council rules if they don’t suit their area. National regulation needs to be almost completely stripped away. Bad developments should be able to be blocked, not bulldozed through by planning inspectors. Incentives for local people should be increased and also allowed to be spent on whatever local people think their area needs.

Councils that fail to hit their own housing targets should have to release land to local people who want to custom-build. The Government could use this custom-build model to double the amount of new homes to over 200,000 by 2014, boosting construction.

The idea of forcing down housing from the top through a broken 1940s planning system is not the answer. It will be a failure economically, aesthetically and politically. It will neither deliver the numbers or quality of homes we need, nor electoral success.

Sticking to the current top down approach is akin to driving full steam ahead into a tree. Fortunately there’s still time to swerve onto a better path that will get Britain building in a way that doesn’t annoy local people or involve starting from scratch.

Alex Morton is head of housing and planning at Policy Exchange