The effect of increasing demand and the limited supply of housing adversely affects the quality of life for individuals, our social and inter-generational cohesion and places an ever increasing pressure on our environment and cost on Government. At the same-time the state pension is insufficient to live on and personal savings rates are inadequate to fund retirement. The attached factsheet helps us understand the scale of the problem.
Restricted supply of housing, quantitative easing, cheap credit, foreign cash investment, tax and demand focused policies affect the price of houses and rent. Renters and house owners alike enjoy or suffer the effect of these policies, which are outside their control.
To give one real cost example, between 2012 and 2018 the combined cost of land and build per property sold, reported by one of the Uk’s largest house builders, rose by just £ 497, a rise of .3 of 1%, yet the gross profit per property increased by £ 41,243, a 135% increase; financed by buyers over the length of their mortgages.
We need to increase housing supply not merely regulate demand, yet new build is insufficient.
The Nations existing owner-occupied housing stock is under-utilised as a source of supply of properties for rent. Homes within Homes extends the concept of the rent-a-room scheme which encourages homeowners to rent out rooms to lodgers, to tenants occupying an independent area for living with landlord-homeowners continuing to remain in occupation. The scheme we propose will increase the supply of affordable housing and provide an income for Homeowners, many of whom may have insufficient pension provision.
The rates of return for Homeowners and the potential to reduce rent levels, inclusive of shared service costs, is staggering. In such an environment an unregulated market would offer the potential for abuse through overcharging for conversions or charging onerous interest rates on loans to finance conversions. For this reason and in order to control the quality of conversions and to incentivise Homes within Homes there needs to be a regulatory environment that protects tenants and homeowners. We propose conversion works supervised by local government under an HMRC approval scheme, enabling the Government to give targeted incentives to Homeowners to make conversions.
The Government’s role in framing policies encouraging the development of Homes within Homes is critical. Policies targeted through HMRC registration could include allowing rents to be earned at nil or low tax rates or to allow the cost of conversion to be offset against earned income as well as rental income. Preferential, discounted rates of inheritance tax for those who convert and let could also be offered.
The benefits of this new policy would affect many aspects of our lives: incomes, rent levels, the associated cost of the housing benefit component within Universal Credit and the environment by reducing the demand to build on undeveloped green and brownfield sites.
At Homes within Homes we want to work with anyone who is interested in the use of the existing housing stock to solve the housing crisis, we hope that anyone visiting this website may be motivated to talk, with us, interested individuals, businesses, or Government and Social policy developers.
We simply must work together to meet the Nations housing needs and there is a solution.
Homes Within Homes