Executive Summary

The United Kingdom's housing system is broken by design. Forty years of policy choices treated residential property as an asset class for building wealth rather than as social infrastructure, and the results make little sense on any other terms. At the end of March 2026, 177,530 children in England were living in temporary accommodation, the highest number since records began.¹ Private renters in England spend 34% of their income on housing, against 19% for people paying a mortgage.² Among middle-income 25 to 34-year-olds, homeownership fell from 65% for people born in the late 1960s to 27% for those born in the early 1980s.³ Social housing made up about 32% of homes in 1980⁴ and 16% of England's stock in 2024.⁵ Only 12,198 social rent homes were delivered in 2024-25, against a need of about 90,000 social rent homes a year within a total affordable-housing need of 145,000 across all tenures.⁶

This pillar makes six arguments:

1. The planning system has been turned into a tool for people who already own property to block the supply that would reduce its value.
2. Planning permission turns agricultural land worth about £23,000 a hectare into residential land worth about £2.67 million. That windfall is created by a public decision, and the public captures only about a quarter of it.
3. Private housebuilders run a business model built on large land banks and a controlled pace of sales, so the state needs its own delivery capacity to fill the gap the market won't.
4. The buy-to-let sector needs managed reform, not a punitive reversal.
5. The government's own data contradicts the claim that immigration is the main cause of the social housing queue.
6. Housing insecurity damages mental health, child development and education on a scale that amounts to a public health problem, and no amount of NHS spending can fix it while the cause goes unreformed.

Nobody in this story is a villain. The landlord who bought a second property made a rational decision in a system that rewarded it. The housebuilder who manages land supply is answering to shareholders in a planning environment that makes restraint profitable. The politician who avoids housing reform is responding to electoral incentives that make the status quo safer than change. Each of these behaviours makes sense on its own. Together they produce a housing system that is failing a whole generation. The problem is the system, not the people in it.

Key Proposals

1. The Diagnosis: Housing as an Asset Class, Not Infrastructure

Between 1980 and 2024 the UK made a series of housing decisions that were each defensible on their own terms. Right to Buy gave council tenants the dignity of ownership. Removing rent controls improved maintenance. Easier mortgage lending widened homeownership. The planning system protected green space and local character. Each had real merit. Together they built a housing market that works very well as a store of wealth and very badly as a way of housing people.

The failure isn't a simple lack of money. The state spent about £12.3 billion in 2023-24 helping private renters pay their rent through Housing Benefit and the housing element of Universal Credit,⁷ which subsidises the private rented sector instead of building an alternative to it. Help to Buy advanced £24.7 billion in equity loans between 2013 and the scheme's closure in 2023, and the government's own 2026 evaluation found it raised developer margins and prices more than it added supply.⁸ The problem is where the money goes. It has gone into demand subsidies that raise the value of the asset, not into supply that would reduce its scarcity.

2. The Planning System: NIMBYism Built In

The planning system is the main way existing homeowners protect the value of their homes from new supply. Every development needs its own planning permission. The people most threatened by new supply get a formal say through consultation. Decisions sit with councillors who answer mainly to existing residents. A system built like that will be biased against housebuilding. This is not an accident. It is the system doing what its most powerful constituency wants.

The Green Belt is the clearest symbol of this. It covered 1,633,220 hectares of England at 31 March 2025, about 12.5% of the country's land area.⁹ The quality of that land varies widely. Much of it is intensively farmed fields, golf courses and car parks. It is protected less for its environmental value than for its closeness to existing homes whose owners benefit from the limit on supply it creates.

3. The Housebuilder Model: A Built-In Incentive to Under-Supply

A small number of large companies dominate private housebuilding, and their business is as much about land as about building. They acquire land with planning permission and release homes at a pace that protects the price of each one. Taylor Wimpey's land bank holds around 79,000 plots, 7.8 years of forward supply, and every site it needs for the following year already has planning permission.¹⁰

The Letwin Review of 2018 is more measured than campaigners sometimes suggest. Letwin found no direct evidence that volume housebuilders deliberately slow build-out to hold up prices. He identified the "absorption rate" as the main constraint: the pace at which a local market can absorb a largely uniform product without the price falling. He recommended more variety of product and tenure on large sites to raise that rate.¹¹ This project goes further than Letwin in one respect, and the inference is ours, not his: the absorption-rate ceiling may itself be a product of a market that rewards controlled release. Either way, a body building social rent homes for people on a waiting list, rather than homes for open-market sale, would not face the same ceiling.

The large housebuilders' operating margins averaged between about 17% and 25% a year over 2019-2023, from Taylor Wimpey at 16.8% to Persimmon at 25.4%.¹² Those are not the margins of a sector struggling to build. Social rent made up 12,198 of the 64,762 affordable homes delivered in 2024-25, under a fifth.⁶ Part of the reason is that developers submit viability assessments arguing that affordable housing requirements would make a scheme unprofitable, and under-resourced councils often accept them.

4. The Case for a National Housing Corporation

The Generational Reset proposes a National Housing Corporation (NHC): a public body with a mandate to build directly, access to public land, borrowing powers outside the limits that have historically blocked council housebuilding, and a specific remit to deliver social rent homes, the tenure the private market will never produce at scale on its own.

This is not a new idea. It is a return to something that worked. In 1953 councils completed 245,160 homes, the most in any year on record.¹³ The post-war programme built most of the social housing that still exists. It was dismantled because the politics changed, not because it failed: Right to Buy sold the stock, councils were long barred from reinvesting the receipts, and private delivery became the default assumption of housing policy whatever the evidence.

The NHC would have five core features:

• a mandate to build directly;
• access to public land at below-market transfer prices;
• borrowing powers set outside public sector borrowing limits;
• a specific mandate for social rent set at 50% of market rent;
• the capacity to develop brownfield, transport-corridor and Ministry of Defence sites that private developers find uneconomic.

Germany's municipal housing companies are the model worth copying in detail, not just citing.¹⁴

• Structure. Companies like Berlin's HOWOGE are ordinary limited companies, majority-owned by the city.
• Governance. They have a management board plus an independent supervisory board, and a cooperation agreement with the city sets their social and growth targets. The city decides what is to be achieved through the contract, and the board decides how.
• Finance. They don't depend mainly on central grants. HOWOGE borrows against its own balance sheet with an S&P rating of A (long-term) and A-1 (short-term), and in 2026 it secured a €500m European Investment Bank facility for around 3,200 more homes.

Singapore's Housing and Development Board, which houses around 77% of residents (down from over 80% a decade earlier), is useful only as evidence that state delivery can work at scale. Its design doesn't transfer. It rests on the state owning around 90% of Singapore's land after a 1960s-70s compulsory acquisition programme under continuous one-party government, on leasehold-only tenure, and on financing tied to compulsory national savings. None of that has a UK equivalent.¹⁴

One common assumption is wrong. The UK's land-acquisition powers are not obviously weaker than Germany's. The Levelling-up and Regeneration Act 2023 lets English authorities exclude "hope value" from compulsory purchase compensation in some cases, which Germany's narrower pre-emption regime doesn't match. The gap between the two countries is in delivery bodies and financing, not in legal power over land, and the NHC should be designed to close that gap.

5. Land Value Capture: The Publicly Created Windfall

When agricultural land in England gets planning permission for housing, its value rises from about £23,000 a hectare to about £2.67 million.¹⁵ That is a 116-fold increase. It is created by a public decision and goes almost entirely to a landowner who did nothing to produce it. The planning permission, the roads, the schools and the transport links that make the land valuable are all public. Yet in 2014-15 Section 106 agreements and the Community Infrastructure Levy captured about £2.7 billion of a £12.4 billion uplift, less than a quarter.¹⁶

Every past attempt at comprehensive land value capture has been abandoned: the Land Commission of 1967, the Community Land Act of 1975 and the Planning Gain Supplement proposed in 2006. Each fell to the same dynamic. Landowners held land back, expecting a change of government to repeal the measure. Capture only works if landowners believe it will last, so it needs cross-party commitment built into independent institutions with long mandates.

6. Buy-to-Let and CGT Reform: A Managed Transition

The private rented sector houses about 4.6 million households in England, around one in five, roughly double its share in the early 1990s. That growth came from tax and regulatory rules that made residential property the most attractive investment available to people with moderate wealth. The sector now holds two very different kinds of landlord: those who mainly want rental income and provide a real housing service, and those who mainly want capital gains. UK policy has strongly encouraged the second kind while treating the two the same.

In 2024-25, 2.88 million UK landlords declared rental income to HMRC. In England, 45% of landlords own a single rental property, the typical landlord is 59, and nearly two-thirds are 55 or over.¹⁷ Many bought property to top up a pension, a rational response for people who saw defined benefit pensions disappear and a system that made property accumulation pay. These are not villains. They followed the incentives they were given. The Generational Reset's position is that those incentives have to change, carefully, with notice, and in an order that puts new supply before any market correction.

7. The Immigration Argument: What the Data Shows

Immigration has become the default political explanation for the housing crisis. As an explanation for the social housing queue, it is wrong. In 2023-24, 87% of new social housing lets went to UK nationals. That is the housing ministry's own figure, published alongside a proposed "UK Connection Test" that the government itself concluded would have little or no discernible effect. In 2021, 15% of people living in social housing were born outside the UK, slightly below the foreign-born share of the population as a whole.¹⁸ UK-born families make up most of the 1.34 million households on council waiting lists.¹⁹

The queue is long for other reasons. About 2.04 million homes in England have been sold under Right to Buy since 1980.²⁰ The promise to replace each one only dates from 2012, and even now replacement falls well short: in 2024-25, councils recorded 7,494 eligible sales and funded 3,593 replacements, about one for every two sold.²⁰ Housebuilding has also run below household formation for decades. Immigration does add to housing demand, as the Immigration pillar's own analysis says. The data shows that migrants are not the bulk of the people in this particular queue, not that immigration has no effect on housing pressure.

8. The Steel Man: The Strongest Case Against Change

'A National Housing Corporation will repeat the failures of 1960s council housing'

The post-war high-rise programme failed in its construction, in its social effects and in long-term maintenance. Those failures were real. The answer is institutional design. An arm's-length corporation with independent governance, professional leadership, community involvement and maintenance funding built into its business model is a different thing from a 1960s municipal programme driven by slum-clearance targets and system-built contracts.

'The UK state can't deliver major projects at scale: look at HS2, Hinkley Point C, Universal Credit'

This objection deserves a specific answer, because the three usual examples tell us less about housing than they seem to.²¹

• HS2. Its overruns come from construction-cost inflation and repeated political changes of scope on a long rail line. Any decade-long delivery body faces those risks, but they are not specific to housing.
• Hinkley Point C. Its overruns are a first-of-a-kind nuclear problem that has recurred at EPR reactor sites around the world. Housing uses proven, standard construction methods, not new reactor engineering.
• Universal Credit. Its problems came from building a large bespoke digital system in a department with little in-house digital expertise. That is relevant to an NHC's tenant and waiting-list systems, not to its ability to build.

The precedent that does apply, and which this pillar addresses head on, is Croydon's Brick by Brick. This council-owned housing company collapsed in 2020-21 and contributed directly to the council's Section 114 notice, its declaration that it could not balance its budget. It failed in two ways. Its financial performance was kept from the council's own scrutiny committees, and every site had a bespoke design, which defeated any programme-wide control of cost or schedule. Those are exactly the failures an NHC has to be designed against, and that is why this proposal specifies independent governance with real transparency duties and a standard delivery model.²¹

There is a working positive precedent too. Homes England's programmes delivered 40,332 completions in 2025-26, up 9% on the year before, and 80% of them were affordable homes.²¹ That shows the UK state can already run a large housing programme competently. It does so as a funder working through housing associations and developers, though, not as a direct builder. Building directly is the extra capability an NHC would have to prove.

'80% CGT will crash the rental market before alternatives are built'

This is the strongest objection, and it is taken seriously. The amnesty window and phased introduction exist to address it. The commitment that NHC construction comes before the buy-to-let correction is a hard design rule. A rental market correction before replacement supply exists is a displacement crisis. A correction after it is a rebalancing.

'Land value capture will cause landowners to withhold land from development'

This has happened before. The answer is a long-term, cross-party framework that landowners can't bet on being reversed. Every previous scheme was abandoned because one party introduced it and the next repealed it. Commitment built into independent institutions is the only approach that has worked elsewhere.

8.1 The Argument, Made Explicit

Sections 1 to 8 make the case for a National Housing Corporation in ordinary prose. This section sets out the same case in a structured form, following How We Reach Conclusions, so the reasoning can be checked rather than taken on trust. No claim here is new. Each stage restates what the sections above establish, with its confidence marked.

10. Proposals for Change

The following are this pillar's evidence-based proposals, put forward for public discussion and challenge.

• Establish a National Housing Corporation with a target of 100,000 social rent homes per year within ten years, funded through central government capitalisation, NHC borrowing against its asset base, and land value capture from development sites.

• Introduce comprehensive land value capture: compulsory purchase of NHC development land at agricultural or existing use value; a reformed CIL covering all local authorities; and a statutory requirement that 50% of planning uplift on private developments above 50 units is captured for public benefit, with viability assessments checked independently.

• Reform Capital Gains Tax on investment property: 80% CGT on disposal of third and subsequent properties; 40% on second properties; a three-year amnesty window at current rates from a fixed date; a 15% additional dwellings stamp duty surcharge on new investment acquisitions above the second property.

• Reform the Green Belt through a mandatory environmental value assessment of all designated land, with absolute protection for high-value open space and strategic release of low-value land in areas of acute housing need, and all planning uplift from released land captured for public benefit.

• Require independent assessment of every developer viability assessment submitted to reduce Section 106 affordable housing obligations.

• P5 Start a national brownfield audit covering surface car parks, disused airfields, redundant retail parks and Ministry of Defence land, and vest identified sites in the NHC with streamlined planning approval.

• P5 End demand subsidies, including any successor to Help to Buy, that raise house prices without expanding supply. Direct all housing subsidy to new supply, land value capture and social rent delivery.

• P6 Set a cross-government homelessness target: halve the number of children in temporary accommodation within five years, with ring-fenced funding for council prevention programmes and NHC emergency delivery.

• Publish quarterly reports on housing delivery against need, covering total homes built, social rent homes built, children in temporary accommodation and average rent-to-income ratios, independently assessed and comparable with international benchmarks.

The housing crisis is not a mystery. Its causes are known, the evidence is on the record, and countries that have dealt with it have done so through versions of the proposals above. What has been missing is the political will to act against the interests of those who benefit from the status quo. The Generational Reset does not pretend this is easy. It insists it is necessary.

The Generational Reset is a non-partisan, public-interest project. It is not affiliated with any political party, does not accept corporate funding, and publishes all its work under open licence for public discussion and adaptation.

For public discussion. Not affiliated with any political party. | generationalreset.org

The Generational Reset | S1_04: Housing | For public discussion. Not affiliated with any political party. | generationalreset.org