Paying every adult an unconditional basic income of £11,375 a year can solve the housing crisis.
It will help reduce house prices, free up existing council and social housing as well as reduce rents.
A BIG Political Party Government will give low interest mortgages for self build houses to anyone on the unconditional basic income.
On average people currently spend a third of their disposable income on a mortgage.
A third of the unconditional basic income is £315 a month.
A repayment mortgage for £78,500 at 1.5% interest ( this is three times as much as the current Bank of England base rate of 0.5% ) would cost £315 a month.
The average cost of a new build house in the UK is £155,000
This means 2 people with a joint unconditional basic income of £22,750 could afford the repayments on a £157,000 mortgage to buy a £155,000 self build house.
These 2 people do not have to be couples.
This will enable more new houses to be built, in a sort of national housebuilding scheme, without costing the BIG Political Party Government a penny, as the full cost of building each new house will be recouped in mortgage payments, with an additional 1.5% interest as a profit for the Government.
As more new houses are built, the supply of houses increases. The economic law of supply and demand means that this increase in supply of houses will reduce house prices. This in turn will reduce rents.
Rents will also be reduced because everyone will have the option of buying a new build with a cheap government “new build mortgage” if rents become too expensive.
This new build housing glut will also free up existing council and social housing, which will further increase the housing supply, with the resultant effect of keeping house prices and rents low.
So an unconditional basic income of £11,375 a year for every adult, will not only free up the creativity and inventiveness of each individual, not only meet everyone’s basic needs for food and shelter, but will also enable a massive government house building initiative, without costing the government (tax payer) a penny. In fact it will do so while making the government (tax payer) a profit.
What’s not to like?