Speaking at the Liberal Democrats annual conference in Glasgow, Cable demanded reform of the market and said Chancellor George Osborne’s policy had made properties ‘less affordable’ by driving up house prices.
“We’ve got a horribly distorted land market,” he told the conference. “The ideal solution, which I support, is land value taxation. But until we get there, there are practical ideas like auctions of land which we could get into to deal with that problem.
“Mr Osborne has this policy called Help to Buy, which does not actually help you to buy because it drives up the price and makes it less affordable. What we really need is help to build. Small builders desperately need credit.”
Last week Prime Minister David Cameron praised the scheme’s impact, stating it had already proved critics wrong.
Cable, speaking in a debate about housing policy, said councils needed to have the ability to halt the Right to Buy policy as properties were not being replaced by local authorities.
“The Right to Buy policy, without replacement, has done enormous damage and we have to stop that,” he said.
These calls were echoed by Liberal Democrat president Tim Farron who described the rental market as ‘unstable’ and said the amount needed to raise a deposit was too much.
“The current trend is horrific,” he said. “In the early 80s, you could buy a house on the equivalent of £20k salary with a deposit of £3,000. Today, that is laughable. Now, you need around £36,000k a year, much more than that if you live in London or the Lake District, or else you need help from your parents. And they’d better be wealthy and generous.
“Our housing market robs us all of opportunity, but especially it robs the under 40s. Children growing up living in unstable rents, bumped from school to school. Communities broken up, segregated, socially decimated. Businesses struggling to find workers, workers struggling to pay rent. Lonely, sicker, older people. London built for foreign investors, not the people who work there.”
Earlier in the day leader Nick Clegg revealed plans to build 50,000 new homes on a new rail link between Oxford and Cambridge.