Reader's Letter Of The Day

Spotted by Carol W in the FT:

Sir, I cannot agree with Roger Fryatt’s suggestion of an even greater role for housing associations (Letters, November 9). Housing associations already benefit from cheap money and their role can be positively harmful. Like private landlords, housing associations exhibit mixed behaviours. Unlike elected local councils, which know their decisions will be considered by voters at regular intervals, the boards of housing associations have no accountability; they face no competition and have huge powers to decide who should, and who should not, receive a very selective benefit of cheaper rents.

The real problem is too few houses (or too many people). With a limited supply it’s especially important that what is built is what is needed. The housing market provides that. A decision by an unelected body does not. And with a limited supply, designating some housing as social simply increases the cost of free market housing. So the chosen few receive a very valuable benefit to the detriment of others, not chosen, but who are otherwise in almost the same position.

The answer is more houses, and one way to encourage that, as well as permitting more housing to be built, is a universal land tax – a tax on the value of all land, whatever it used for, based on the land value (reflecting planning consents and hope value but not buildings).

Jon Zigmond, Rosedale Abbey, North Yorks.

We'll have to mark him down for trotting out the misconception about "too few houses", that is a surprisingly small part of the solution, with a land value tax, we'd be using existing land and buildings much more efficiently/rationally, so the apparent supply shortages would largely melt away.

But well done for laying into the Housing Associations. I've long been saying this. They manage to combine the disadvantages of the private sector and the social sector.