David Aaronovitch: For sale: a sensible housing policy

'It is Welsh speakers, not malign hill spirits in league with the Saxons, who are selling their homes to incomers'
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"There is another foot-and-mouth disease," thundered Mr John Elfed Jones, former chairman of the Welsh Language Board, in the Welsh language magazine Barn this month, "... and there is no sign either the Government or the Assembly is prepared to do anything to close down the devastating side effects that have been generated by this particular foot-and-mouth disease."

This conjures images of blighted countryside, smoke rising from pyres, weeping farmers at the gate, wailing shepherds on the hill. What could be as bad as this? English people in the wrong bloody place, that's what. They come over here, rape our women on the national health, buy up all the houses and play darts in pubs, scoring 501 in the flat vowels of the Midlands.

Actually it is not clear whether Mr Elfed Jones's quarrel is with English people, with English-speaking people (or rather non-Welsh speakers, who are described, both unflatteringly and sometimes inaccurately, as "monoglot"), or with "outsiders". But the essence of his complaint is easy to understand. "In-migrants" are bidding up the price of houses, forcing local young people to emigrate to Patagonia or Wrexham, and bringing with them a "foreign" tongue.

"Very quickly," he warns, "almost without anyone noticing, our indigenous language and community way of life has been changed beyond recognition."

It always bothers me when peoples are compared to diseases; Jews have never quite got over being compared to a bacillus. But Mr Elfed Jones is not alone. The writer Jan Morris has backed a new pressure group called Cymuned, made up of academics, commentators and (this being Wales) poets, which has asked the Welsh Assembly to frame new laws to prevent the Invasion of the Monoglots. They want the outsiders out and the insiders in.

Let us forgive Mr Elfed Jones his intemperance, and ask for a moment whether he has a point. If he were a native American, an Amazonian Indian or an Inuit then many of us would find ourselves sympathising with his cause. Last year a third of all properties bought in the Gwynedd area were sold to folk coming from outside. Even in a city, that would be quite a turnover. In a rural area with much of its identity invested in its language it looks like a threat. We may be able to conceive that it would be a good idea to slow down the pace of change a little, if we can.

But can we? Local young people may be moving away from the area for many more reasons than just house prices. It's a bitch being young in the country. And even if they want to stay, how would you intervene to put them in the houses that the incomers are now buying? Would you give houses a listed status, designating them for Welsh speakers? A crash course in the language, part paid for by estate agents, would sabotage that one. A residency qualification, perhaps? Based on what? Local grandparents? DNA? Nose-measurements? Would doctors or firefighters be exempt? What would you do when the first EU national to be discriminated against argues a case under the Human Rights Act?

Nothing seems as intractable as the blind effects of the housing market. As the Welsh First Minister, Rhodri Morgan, pointed out yesterday, for every buyer there is a seller. It is Welsh speakers – not malign hill spirits in league with the Saxons – who are selling their houses to incomers. They do it because the price they receive is more important to them than the price their community pays. There is a demand, that demand then pushes up the price, and the price further determines who comes in.

Mr Elfed Jones should know that those of us in London and the South-east face a similar problem. The average price of a home in the capital is nearly 90 per cent higher than the cost of a similar property elsewhere in Britain. You can get a semi-detached house in Humberside for one-fifth of what it costs in Greater London.

Some of this is down to outsiders. I was struck by the words of a Hans Dome from Holland, speaking to the London Evening Standard this week. With his wife Gentia, he has rented what is described as a penthouse in Richmond for two grand a week. He is not impressed. "It's called a penthouse by people here," he said, "but we would call it an attic. In Holland, for the same money, we could have got a villa with three acres." Perhaps we should institute a language qualification to prevent Netherlanders from driving out native Richmonders – anyone speaking English too fluently would not be permitted to rent or buy there.

The biggest difficulty, however, seems to be finding homes that public servants can afford. Teachers, police officers and nurses in London are not paid five times the salary of their Humberside colleagues, and I know from experience that some of them now commute vast distances from far-flung suburbs to be at work by the time the bell rings. Others simply don't come here at all.

In the long run the market will adjust. Public services in London will decline, while those in cheaper areas (the North and so on) will improve. Companies attracted to these facilities will relocate, prices up there will rise a bit and those in London and the South-east will fall, and over time the thing will balance itself out and I will be dead and my ashes scattered furtively on Hampstead Heath when the park wardens aren't watching.

So we won't wait. We will certainly subsidise house purchase. But for whom, and where? Government proposals are promised for later in the month, but it has been suggested that teachers in the south-east of England, for instance, could qualify for interest-free loans and grants of up to 25 grand each (which would make a handy deposit). Nurses and police officers can expect similar treatment. This scheme will cost £250 million.

There are some big problems here. The most obvious is that subsidies could send house prices up even further, the rise quickly absorbing the original grant. And, by the way, making things even worse for public servants not covered by the scheme – such as bus drivers working for private companies.

On the geographical fringes of the scheme unsubsidised areas might lose out to subsidised ones, as nurses et al flit over the borders to qualify for their extra dosh.

Mr Doug McAvoy of the National Union of Teachers has said that this approach by the government is welcome, but that it misses the main point. I agree. There is another route that we could follow, albeit one that would give Doug a fit of the vapours. We should allow schools, hospitals and other services to set their remuneration packages at a rate and in a way which is appropriate to their circumstances. Some in shortage areas could choose to invest in flats for single teachers, or police officers and offer those as part of the contract. Others could do it by increasing the basic salary.

The additional funds could be found from a locally determined property tax, more highly geared than the council tax, which would give greatest revenue in areas of most expensive housing.

So how much could this approach help the Welsh? Quite a bit, actually. A high local property tax in Gwynedd could help to depress prices. It could also subsidise both social housing and – if desired – dusk-to-dawn cultural events conducted only in Welsh. Which is as much, Mr Elfed Jones, as a free society can possibly do.