Housing Money

The right of all people to have access to a secure home meeting minimum quality standards is affirmed.

However, unrestrained application of the free market has transformed housing into an investment, leading to vast over-pricing and the unjust financial exclusion of many from appropriate quality homes.

The establishment of ‘housing money’ is proposed. This would be separated from the normal money system, and could only be used to buy and sell homes, or to be passed efficiently to the next generation. This proposal should over time produce stable, affordable house prices, and a significant reduction in housing debt levels.


Thesis Background
The first and last pages of the Bible indicate man dwelling with God, without cost, and in perfect satisfaction. Moreover it is notable that when the Israelites finally settled in Canaan they were allocated their home plots freely by God's grace, not according to merit. Furthermore the Jubilee laws make clear that these homes were to be held in perpetuity by the original families rather than being traded. Whilst much has changed by the 21st century, the principles of homes being held within families for generations, and of them being excluded from trade, could be applied. A transition to a system of 'ringfenced' housing money held in special mutual 'banks' is proposed. They could be called Building Societies! Members could invest and withdraw money in the usual way. But all proceeds from house sales would be paid into a ringfenced Building Society account, and subsequently such money could only be used for home purchase. Tax free transfers to other 'ring-fenced' Building Society accounts would always be available. On death of an account holder any outstanding balance would have to be passed to other 'ring-fenced' account(s). To prevent 'leakage' of 'housing money', costs associated with house purchase/sale would need to be met with ordinary money. Hopefully this system would produce a significant initial fall in house prices followed by price stability. This may need government control. Perhaps a formula is required, setting a price ceiling based on house/plot area and location. House prices need to track any inflation/deflation in the regular currency to ensure the retention of housing value. In time, with stable pricing and efficient transfer of housing value to next generations, the need to borrow to buy should be significantly reduced. 'New' money would only be required by those with no/inadequate inheritance. Home loans should be made by Building Societies, using the money invested in them, and should be structured such that a particular percentage of equity is purchased every year. If there is movement in house values over time, the cost of equity purchase should track such movement. This scheme should only apply to first homes that are actively lived in by the home-owners. 'Leakage' of housing stock for other uses must be strictly limited. Clearly there will still be a need, albeit reduced, for social housing, and for private rental. Clearly transition to such a scheme would take significant time and need careful management. A particular issue is that many people are planning to cash-in a significant proportion of their housing value to finance their old-age care. Whilst this is current reality it is not deemed to be the best solution either for housing or for old-age care. Separately, I also believe that government regulation should be implemented: to accelerate building of the 500,000 homes already approved; to acquire undeveloped/brownfield land and empty houses (not green belt) at agricultural prices for social/affordable housing; to enforce release of empty investment properties; to improve building/maintenance standards in the rental sector; and to improve tenants' rights.

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