An Englishman’s home is his castle! There is no place like home! Other cliches are available!
Ask the common man or woman on the street what are the most important things in their lives and their family and homes are likely to make the top two.
We are all well aware that there is a housing crisis, not just in this country but across much of the western world, with sky high property prices being driven by supply and demand: too few homes being chased by too many people.
Should governments turn around tomorrow and put an end to mass immigration then perhaps there is a chance that the supply-demand formula will eventually correct itself. But given that is an implausible future then we must build more homes at a far greater rate than we currently do.
So far, so uncontroversial – right?
There is a significant source of untapped potential funding to once again kickstart local housebuilding that is not being utilised: local authority balance sheets.
As an example, Devon County Council has £20million in cash deposited in loans to third party councils with a loan duration of three years; a further £96million in cash deposited in shorter duration loans to a variety of third party councils and financial institutions including to foreign owned banks; and a further £56million in investments in financial companies such as Blackrock and Aberdeen Global.
Whilst it is prudent to hold cash investments as a reserve fund for councils for a variety of reasons – such as smoothing over income fluctuations and responding to emergencies – are these reserves being used in the most appropriate manner given our current and acute housing crisis? Furthermore, why invest in commercial property like Exeter Science Park Ltd but not residential housing?
There are currently in the south west around 130,000 households awaiting a social housing place and in Devon, excluding Plymouth and Torbay, there are over 8.5k households on the waiting list.
Parts of the south west are some of the poorest in the entire nation with few quality job prospects, poor infrastructure, low life expectancy and poor health.
Investing in residential property will not be a panacea for all of the regions ills, but it would produce an income, retain or increase in capital value (historically accurate over the long term) and help alleviate the housing crisis for some of the most vulnerable people in society.
This is a moral way to allocate public finances, a pragmatic one and a way for local communities to show the national government the importance and urgent need for a nation state controlled housebuilding programme.