Headlines: August 27th, 2003

Housing poverty is the most extreme form of social inequality in Britain, according to a report published today by the Institute for Public Policy Research. It sets out the case for dramatic changes to close the housing “equity gap” and increase choice.The author, Chris Holmes, an ippr Visiting Research Fellow , accuses successive governments of bowing to the pressure of nimbyism and ignoring the consequences of growing inequality. The report says, that despite increased consensus amongst experts and politicians on the need for radical measures and new homes, there is often strong resistance to local change. The polarisation of housing provision also has a negative effect on school standards, public services, crime and neighbourhoods – all public priorities.

It shows that there has been a growing divide between people living in the north and in the South East and between the home-owning majority and those who rent. The increase in the ‘equity divide’ has been the greatest cause of the growth of inequality with the value of the net equity of personally owned housing having increased from 36 billion in 1970 to 1,525 billion in 2001.

The report says the people who have missed out are those who have not been able to buy. Tenants living on estates of poor housing have fared worst and the most dramatic evidence of the housing crisis, it says, is the number of homeless households in temporary accommodation, which has risen from 5,000 to 80,000 since 1980.

Its recommendations include Increasing choice for tenants and changing the pattern of housing tenure and closing the housing “equity gap” by ending the of exemption from inheritance tax on ownership of first homes, introducing higher tiers of council tax on more expensive properties and levying full council tax on all second homes. It also calls on the government to reconcile the tension between the role of Regional Development Agencies – to maximise economic prosperity in their region – and Treasury targets for reducing the gap in growth between regions

Housing Equality and Choice is published by the Institute for Public Policy Research – ippr@centralbooks.com.