There are a few issues. First, a huge amount of indirect subsidy is pushing job creating in places that are already very expensive to live. In cities in Wales or the North of England, there are a lot of houses for a fraction of the price of places like London. As a fully remote company, a load of our employees take advantage of this.
There are a lot things the government could do to address this. Tax incentives for companies allowing remote work (full remote, not just hybrid, which still requires you to live near the office), higher business rates for offices in places where housing is expensive, move flights out of Heathrow (it’s completely ludicrous that it’s cheaper to get a train from Bristol or Manchester and then fly to the US or Canada from Heathrow than to use the local airport), better rail connections to airports and cities, and so on.
The second big thing is that the buy-to-let push to treat a second home as an alternative to a pension has left a load of private landlords unable to actually afford to be landlords. They got mortgages at 1-2%, assuming rental income at 3-5% which would cover costs and make some profit. Now mortgage payments are 4-5%: more than rent. First they changed the tax rules to make interest payments come out after tax (which really just favours big landlords, because a company owning a property pays tax on profits, after mortgage interest and maintenance have been deducted). Then interest rates spiked.
This leaves landlords with two choices: put up rent, or sell. The stamp duty increase makes selling harder, as does the oversupply.
I moved away from Swansea 13 years ago. House prices have barely shifted since then, but rent has gone up a lot. There are a lot of ex-rental properties for sale but no one is buying them. Landlords aren’t expanding their portfolios and the post-2008 affordability checks mean that banks won’t lend to people even though they are paying more in rent now than they would pay in mortgage payments.
A forward-looking government would provide guaranteed loans to local authorities for replenishing social housing stocks. They would buy up a load of the cheap houses and make any that are not needed for council houses available at a fair (below market) rate and provide downward pressure on the rental prices.
