The government must learn to mmingle more socially

And that’s the key problem with the ODPM’s five-year plan: it doesn’t go far enough. Homes for All is right to want to increase supply and improve the quality of housing. But to reverse the growth of inequality in housing and social polarisation we really need a more ambitious vision.

Government policy aims to enable more people to own their homes, but social housing could become more stigmatised as the tenure of last resort, trapping tenants in areas of concentrated poverty.

As Nye Bevan, the minister responsible for the post-Second World War housing programme, memorably described his vision for socially balanced communities: “It is entirely undesirable that on modern housing estates only one type of citizen should live.

If we are to enable citizens to lead a full life … then they should all be drawn from different sections of the community. We should try to introduce what was always the lovely feature of English and Welsh villages, where the doctor, the grocer, the butcher and the farm labourer all lived in the same street.”

In practice, few council housing estates have ever represented all sections of society and they have done less so as rising earnings have made it possible for more people to buy their homes. Council estates now also house more low-income and vulnerable tenants because the legal duties to house homeless households and to help tenants to pay the rent through housing benefit have improved their access to socially rented housing.

Most people in this type of housing are now poor – not in itself a problem. The problem is that too many poor people live together on single tenure estates. Social housing should not be synonymous with housing estates; it needs to become a tenure “pepper-potted” in neighbourhoods that include owner-occupied and privately rented homes.

The village of New Earswick outside York has been developed and adapted by the Joseph Rowntree Housing Trust over the past 100 years and is a model socially integrated community. It now has a mix of tenures and there is no visible distinction between rented and owner-occupied homes, which exist in every part of the village.

New Earswick is not a unique example of this kind of community. In the 1960s and 1970s a new generation of housing associations were formed in inner-city areas. Initially their aim was simply to buy up older properties to house families living in desperately overcrowded conditions, but as the number of homes grew, the mix of tenures became an important feature of the neighbourhoods. Owner-occupied, privately rented and housing association properties existed in every street, and this made it possible to sustain socially mixed, ethnically diverse and balanced neighbourhoods.

A radical step forward would be to enable tenants to choose a property for sale on the private market and ask their landlord to buy it for them

The current attempts to create a better social mix on large, single tenure housing estates tend to involve offering some properties for sale. But in high-demand areas, this approach can actually make the shortage of rented homes still worse. A better solution is to diversify the tenure into other areas. Councils and housing associations should be buying homes for rent in streets of terraced housing, as well as semi-detached homes in the suburbs, market towns, villages and seaside resorts. Selling homes on estates of socially rented housing could fund this.

Choice-based lettings schemes are becoming widespread and popular, but their limitation is that they only offer a choice of homes currently owned by councils or housing associations. A radical step forward would be to enable tenants to choose a property for sale on the private market, and ask their landlord to buy it for them.

Ridgehill Housing Association in Hertfordshire did this. Instead of offering the family with top priority on the housing register a vacant property that the landlord already owned, it invited the family to go to an estate agent and choose where they would like to live. The result? A delightful two-bedroom house with flowers blooming on the front wall bought for £128,000, within the normal Housing Corporation cost limits.

More choice also depends on having an adequate supply of homes. The extra homes proposed in the five-year plan will reduce the housing shortage in areas of high demand but are still not enough to keep up with projected growth in the number of households over the next five years. Other European countries, especially Germany, have shown how matching housing supply with demand keeps houses prices stable. And as earnings have risen, many more people have been able to afford to buy their homes.

Providing more affordable homes and giving more choice to low-income tenants will increase public expenditure, but there are resources within the housing system, especially in the huge windfall gains that many homeowners have made from the growth in house prices. Over the next few years the government will receive substantial extra revenue from simply keeping inheritance tax at its current rate. More could come from removing the exemption of owner-occupied homes from capital gains tax or reducing the lower threshold of £263,000 on liability for inheritance tax. There is a powerful social justice case for taxing windfall gains so that all members of the community can have a decent home.

Overall, the government has made some moves in the right direction with its five-year plan, but whether Homes for All will actually live up to its title is another matter.