In last week's autumn statement, Chancellor George Osborne was able to showboat the supposed successes of his austerity-driven financial agenda and renew his increasingly unlikely commitment towards balancing Britain's topsy-turvy budget. Yet while he's busy fritting away government assets and liabilities at break-neck speed, Mr Osborne appears keen to ignore a major housing crisis looming just over the horizon. It won't be pretty.
Whichever way you want to look at it, Britain's economic recovery is living on borrowed time. As the coalition continues to encourage property ownership by way of its ill-advised subsidised mortgage scheme, demand for cheap housing has soared. It's not hard to see why. With the government's 'Help to Buy' scheme, aspiring homeowners of all ages are being guaranteed mortgages of up to £1million, with leverage ratios as high as twenty-to-one. You'd have to be an idiot not to scramble for a limited time offer like that. But at the end of the day, Help to Buy is nothing more than a tactful way of improving the Treasury's bottom line by deteriorating bank balance sheets and underwriting standards.
As of yet, there's no way to tell whether the poor sods who sign on to the scheme will actually be able to afford the interest rates on their shiny new homes in ten years' time - we'll just have to wait and see. But in the meantime, Help to Buy is fanning the flames of a very different housing crisis.
According to a new study released by the National Housing Federation, home prices across the country are set to soar by a shocking 35% over the next six years. By 2020, Oxford Economics estimates the average London home will cost around £647,500 - which is over 18 times the city's average annual salary. Even worse, private sector rents will go up by almost 40%.
So, assuming Britain's living wage doesn't jump in line with that increase, the Treasury department will soon find itself in serious trouble.
As a direct result of the nation's two broken housing markets, it's been estimated the number of working Brits forced to rely on government housing benefits to pay their rents or mortgages will rise by 310 people per day. With taxpayers already shelling out almost £17billion a year to subsidise the basic (but increasingly unattainable) living costs of fellow citizens, this inevitable spike in housing prices will cost the government more than a pretty penny in benefits.
Now, there are plenty of ways to avoid this colossal public burden. But the bulk of tangible solutions - such as applying capital gains tax to primary residences, or imposing price cap reductions - are political minefields. Consequently, the only answer left is to increase supply.
By no means is that a lofty goal. Commercial developers would kill for any sort of approval to build as they see fit; however, the trick is encouraging an increase in homes that are actually affordable. That means a solid investment in the hundreds of social housing schemes local authorities already have in place. Or, better yet, MPs could look to draft a brand-new, large-scale programme offering the right-sized homes for those most in need - which would practically pay for itself, given the government's rock-bottom borrowing rates. Even with the sub-economic rents that go hand-in-hand with social housing, taxpayers would still save in the long run, because they wouldn't have to subsidise unnaturally high mortgages or toss away billions more in benefits. Yet for whatever reason, Mr Osborne has opted to prioritise our 'right to buy' over our right to live.
Twenty years ago, that decision would have been political suicide. Yet in the age of Help to Buy, something about affordable housing has been made to appear volatile. Politicians would do well to eradicate that misconception post-haste - because with house prices set to reach unattainable heights long before the polls open in 2015, hundreds of thousands of citizens will soon be scraping the barrel just to keep a roof over their heads. That's one hell of a motivator to get out there and vote.