The Big Question: How should we deal with the crisis over affordable housing?
Why are we asking this question now?
Because alarm bells are ringing in Downing Street over the shortage of low-cost homes and the problem that young people face in getting a foothold on the property ladder. Boosting the supply of low-cost homes will therefore be a key feature of Gordon Brown's programme for his first year as Prime Minister, which he will outline to the Commons today.
Why has housing shot up the agenda?
Tony Blair had a blind spot on the issue of affordable housing, which was a surprise given his usual sensitivity to the issues that preoccupied the voters. Gordon Brown has made it clear he will not make the same mistake and has made housing one of his priorities for government. He underlined that by giving the Housing Minister the right, for the first time, to attend Cabinet meetings.
Jon Cruddas, the MP for Dagenham, also forced the subject on to the agenda during Labour's deputy leadership campaign, describing it as the biggest issue facing Britain and arguing that the shortage of affordable homes was inflaming community tensions in multi-cultural areas such as his east London constituency.
It must also have occurred to Ministers that although middle-class voters might be happy with the soaring values of their houses they will also be increasingly alarmed at how difficult is for their children to buy homes of their own. At a time when they expect to be enjoying a comfortable retirement, growing numbers are being forced to contribute towards their children's mortgages.
How serious is the problem?
Extremely serious - and worsening by the month as the gap between the cost of a mortgage and household incomes continues to widen. The Council of Mortgage Lenders said yesterday that during May the average first-time buyer now needed to borrow a record 3.37 times their income to afford a home.
Mortgage interest payments now eat up around one-fifth of a new homeowner's monthly pay, the highest level for 15 years and double the rate a decade ago. The figures will continue rising as two recent interest rate increases are still to have an impact on monthly repayments.
The problem is at its most acute in London, where mortgage payments account for more than one-quarter of income, but is still being felt in almost every part of the country. Desperate buyers are being forced to take out mortgages at five, six or even seven times their salary, with inevitable knock-on effects as family struggle to cope with the cost of borrowing.
Shelter, the housing charity, calculates that problems with mortgage arrears and repossession have doubled in the last two years. Adam Sampson, its chief executive, says: "Having been Chancellor, Mr Brown plainly understands the housing market is a major driver for the country's economic health. But he must also know that vast individual debt is now being carried by people as a direct result of people borrowing against the value of their property."
How did we get into this situation?
Housing policy reached a turning-point in 1980 when the Thatcher government gave council tenants the right to buy their homes at a discount. Labour initially opposed the sales but soon dropped its resistance to such a popular policy and more than 1.7 million people have taken advantage of the scheme over the last 27 years. But councils - which face tough restrictions on spending - and housing associations have only built 700,000 properties to replace the lost housing stock over that period. Nor are private builders, who deliver 90 per cent of new homes, keeping pace with demand, with 160,000 homes constructed last year, compared with the 223,000 that the country is thought to need.
Social trends have also ratcheted up the pressure on the country's housing stock. People are living longer, young adults leave the family home at a younger age, single occupancy households are on the increase, and high levels of immigration in recent years have also added to the problem.
What is the solution?
With 70 per cent of adults owning their own home, but 84 per cent saying they would like to, Gordon Brown's aim is to close the gap between aspiration and reality. A housing green paper due shortly is expected to loosen the controls on council house construction by local authorities.
The emphasis would be on a mixture of family homes and flats, which could be offered on a range of terms including shared equity, which would allow young adults to pay part-rent and part-mortgage. Reform of the mortgage system will be proposed by the Government because of concern that lenders were offering only shorter-term mortgages so they could repeatedly charge high arrangement fees.
Alistair Darling, the Chancellor, this week proposed that lenders should offer buyers fixed-rate home loans for periods of up to 25 years. Such a move would bring more stability to the housing market, allowing borrowers to plan over a long period and to be insulated from fluctuations in interest rates. Ministers will streamline the planning system to remove some of the bureaucratic obstacles to house building and free up more land for development.
David Cameron has also singled out the issue as a priority for an incoming Conservative government. He told last year's Tory conference that it was "our social responsibility" to build more homes for young people.
Yesterday's Tory review of social policy backed the extension of right-to-buy, rent-to-own and shared equity schemes for first-time buyers.
The Home Builders' Federation is calling for government help for private developers to build more low-cost houses. Paul Pedley, the chairman of its affordable housing policy group, said: "Young people do not want a black-and-white choice between social housing and private housing they cannot afford to buy. Most want to get on to the home ownership ladder by accessing affordably priced market housing."
How can we square house-building with the environment?
For all ministers' promises to promote eco-friendly construction schemes, it can't. The best that can be hoped for it that the environmental impact will be minimised.
Some new homes can be developed on brownfield sites in towns and cities, but the reality is that the greatest pressures are in the semi-rural areas around the major conurbations, with fields disappearing under concrete and tarmac. Mr Darling has said he is determined to protect the nation's heritage, but warns: "If we don't increase the supply of houses, the problem will just get worse."
Hazel Blears, the Communities Secretary, yesterday predicted forthcoming battles over house-building, refusing to rule out redrawing the map of the green belt. She told MPs: "I think we are going to have a tussle... because some people are concerned about environmental issues. But I think the priority has to be to build these homes."
Planners will have had a recent reminder of the environmental risks of rapid house-building as many of the most attractive sites for developers are on flood plains.
Will the problem get worse before it gets better?
* Although interest rates have begun to rise, there's no shortage of buyers and demand for houses remains high
* Any major house-building scheme will take years to have an impact
* Ministers might fight shy of a confrontation with the environmental lobby
* Unlike his predecessor, Gordon Brown appears determined to take radical action on housing, and quickly
* Under new government measures, local councils will soon be given extra freedom to build homes
* History suggests that house price momentum is not constant, and that the current rate cannot be maintained indefinitely
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
History tells investors to keep their nerve when headlines scream 'crisis'
Rain doesn't stop profits at Andy Murray's £600-a-night hotel Cromlix House
Five Questions On: GB Energy's new tariff
Questions of Cash: 'I want a refund on my TV licence payments but they've turned my claim into a soap opera'
Bank-beating exchange rates on your international payments
- 1 Labour rallies behind Flint as deputy leader to offset a Corbyn win
- 2 Katie Hopkins reveals fear she will die during brain surgery to cure epilepsy
- 3 The difference between a psychopath and a sociopath
- 4 Dutch King Willem-Alexander declares the end of the welfare state
- 5 'Cool kids' can go on to become losers in later life, study finds
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
Calais crisis: For desperate migrants it is 'England or death' as they brave dogs, riot police and speeding trains
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...
£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...
£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...
£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...
Day In a Page
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.
Well-located for coastal walks and popular restaurants, this detached four-bedroom home offers views over farmland, to the Solent, the Purbecks and Bournemouth.
If you love high ceilings, school conversions like this one are bang on the money. This two-bedroom flat is minutes from Burgess Park and the foodie haven at Borough Market.
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.