What are the options to solve the UK housing crisis?

While the mass media continues to highlight the ever-increasing price of property in the UK very few are even talking about the housing crisis. There has been a supply/demand imbalance for many years now and despite promises by all political parties there is no solution on the horizon. Time and time again we have heard promises of increased funding for new builds but even in the best case scenario we would still be tens of thousands of properties behind the annual requirement. So what are the options to solve the UK housing crisis?

Open green belts

Green belts have been a bone of contention for many years with many property developments impacted by surrounding greenbelt areas. While there is obviously a need to retain areas of countryside and natural beauty should this be at the expense of much-needed housing across the UK?

The subject of green belts is one which attracts very different opinions and with many environmentalists fighting hard for years to gain recognition they are unlikely to give up easily.

Rent caps

The idea of rent caps was floated by the Labour government some time ago much to the derision of buy to let investors. The idea that regulations would limit rental increases per annum would seem sensible on paper but the potential repercussions could be enormous. Let’s not forget that we operate in a free capitalist market and there is already an array of additional costs which real estate investors have to take on board.

Capping the level of rents across the country would not give the right signal to both domestic and international real estate investors. Why should they be the ones to take any risk acquiring property only to see their income restricted? The idea is that by capping rents across the country this would take some of the sting out of the buy to let market and reduce demand for property overall. This would reduce house price growth and hopefully allow wage inflation to at least partially close the affordability gap. However, is this really feasible?

Tax breaks

The idea of offering tax breaks to developers willing to build affordable housing across the UK would seem to be sensible. By reducing the amount of tax they pay on profits or dividends this would reduce the level of profitability required to break even. The idea is that reducing the overall cost of acquiring land and building property should lead to cheaper housing. However, as this may also impact the value of existing property again this did not seem to be feasible.

When you also take into account the government is increasing the tax burden on property investment and property income, we seem to be moving in opposite directions.


These are just some of the options which have been openly discussed as a means of solving the ever worsening UK housing crisis. Each year which passes without supply meeting demand puts the UK housing market yet further behind where it needs to be. Is there a solution or will markets ultimately find a level and wage inflation increase to close the affordability gap?

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