Our mutual friend

The UK is facing a housing crisis.

Many homes are far beyond the reach of first-time buyers, 100,000 families are in temporary housing and another half a million are cramped into homes that are too small.

Everyone should have the right to a decent home: safe, warm and affordable. A Liberal Democrat government would make housing a priority and invest in new homes to ease the affordability crisis as well as tackling the scandal of empty properties and making our homes more environmentally sustainable.

We must start by recognising that the housing crisis is largely a supply-side problem. Too much money has been wasted in so-called key worker schemes when the need was to build more homes. That is a policy for the few, not the many.

Even Labour’s ideas for major new housebuilding have serious flaws, not least the fact that they will take 20 years to deliver.

We believe a more immediate solution is presented by empty properties – there are more than 850,000 empty homes in Britain, and up to a million more homes could be created in empty commercial space above shops.

The absurd regime under which full VAT is charged on repairs and renovations of old buildings, but new developments on greenfield sites are exempt must be abolished. Reusing existing buildings is not only far more environmentally sustainable, but also quicker and cheaper.

Increasing the supply of homes will help to tackle the affordability crisis that plagues a generation of young people. However, development is not enough and there are other steps that can be taken to help people afford a home.

The Liberal Democrats have always supported the right to buy, but it has brought problems of its own that successive governments have done nothing to address.

The right should be reformed to allow councils to tailor the policy to local circumstances. There are areas of the country in which housing is in desperately short supply and where extensive right-to-buy purchases will make things worse. In other areas, where market renewal is on the agenda, it may be sensible to increase the discount to encourage regeneration.

The most important element of right to buy should be local choice.

Furthermore, we are keen to develop an intermediate housing sector to bridge the gap between the rented sector and the open housing market.

We would push funding towards shared-equity schemes under which people part buy and part rent. We would use the housing budget and planning guidance to encourage councils, housing associations and developers to consider shared equity.

We would also promote “golden share” homeownership, based on a model we have developed in Shropshire where homes remain affordable because the council or housing association retains a stake so it can set conditions for resale.

Our third proposal for the intermediate housing sector is for mutual homes.

We will reform council housing so housing is not starved of funds if tenants opt to stay with the council

Rather than buying the home outright, people would buy shares in a mutual homeownership trust that owned the home.

Under this concept the tenant’s payments work as their first step on the property ladder. The shares they buy in the mutual homeownership trust increase with value as house prices rise. When they wish to move – to buy a home on the open market, for example – they can sell their shares back to the mutual, using the proceeds as equity for their new home.

Mutual homes will also be affordable because the land on which the homes are built would be owned by a separate community land trust. By permanently excluding the land cost from the house price, affordability would be locked in. If elected, we would identify enough surplus public sector land for 100,000 mutual homes in our first year of office.

Yet homeownership is not for everyone and it is also important to foster a strong rented sector, under council, housing association and private ownership.

Attempts to pressurise tenants and councils to transfer homes to registered social landlords would end under the Liberal Democrats. We will reform the council housing system so that housing is not starved of funds if tenants opt to stay with the council.

We would create greater freedoms for councils to invest in upgrading housing themselves, and for tenants who do want to move away from council ownership we will offer the chance to transfer to a mutual housing association, in which they can, over time, build up a share. All tenants of councils and housing associations will be given the right to invest in their homes.

This will give people the chance to move towards homeownership without jeopardising the future of social housing.

There are too many quangos and too much red tape tying up social housing and tenants. Housing associations are answerable to two entirely separate regulators. So we will abolish the Housing Corporation, and give its remaining regulatory functions to the Audit Commission and its financing role to existing regional housing boards.

If we free up councils and housing associations from the bureaucratic national controls they struggle under, they will be able to deliver more and better homes for the people who need them.

There is one more critical issue that must be addressed in housing policy and is too often ignored. More than a quarter of the energy we use is consumed in our homes, with each household creating around six tonnes of carbon dioxide a year – more than the average car.

We need to reduce the impact our homes have on the environment, from the way in which we build to cutting consumption of energy, water and other natural resources.

We would set a target of a million sustainable homes by 2012 and update building regulations and planning law to require more energy efficient buildings.

It is crucial to tackle these environmental issues alongside the broader housing crisis if we are to have a sustainable future.