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The comparison of events in Britain with the experience of other major industrial countries can make an important contribution to debate about policy alternatives. Within Western Europe such comparisons are especially apt since a number of countries of similar size, at broadly the same level of economic development, face many of the same problems and opportunities. The main purpose of the study reported here is to draw lessons for Britain from the experience of France, and to see to what extent the lessons one might be tempted to draw are the right ones bearing in mind the differences between the two countries as well as their similarities.

Executive SummaryDiscussion of the UK's housing crisis is of long date, and tends to focus on a simple story about a mismatch in housing supply and demand and the consequent need to build more homes. Yet the reality is more complex with multiple sub-plots including social housing, stress in the private rented sector, benefits, subsidies and ultimately taxation of home ownership.At the bottom of the market, the crisis is real and acute, as manifested in a sharp increase in homelessness and rough sleeping. The inescapable answer is to increase the depleted stock of social housing and widen eligibility criteria. An increase of 100,000 social units a year in England would help address this problem, as well as alleviate the financial squeeze on tenants of the private rented sector, whose number has grown sharply in the past 15 years in tandem with a steep rise in the housing benefit bill. Recent efforts to curb housing benefit have further increased distress, so it will be necessary to consider increasing benefits again alongside regulatory interventions with private landlords.In the home ownership market, recent government intervention has taken the form of the much-criticised Help-to-Buy Equity Loan scheme. This market policy to support new-build homes should be wound down and replaced by a scheme to endow all young people with a capital sum that they could use for second-hand homes as well. More generally, a more sophisticated approach to planning home-building is needed, both for assessing overall numbers and their regional distribution and in financing the supporting infrastructure.But none of these measures is a panacea for a housing crisis that is in large part a symptom of problems in the wider economy, such as low relative wages for young people, a lack of clarity about environmental issues, and failing places. A successful policy package to address the distorted structure of the housing market must also grasp the most difficult nettle of all – namely the way the tax benefits of owner-occupation incentivise overconsumption of housing and a widening wealth gap between renters and home owners, and between owners in different parts of the country. If we spend more to help those who struggle to afford decent housing, then it is only just to raise more taxation from those who benefit from restrictions on housing supply – whether through reform to council tax, a wider wealth tax or a limited form of Capital Gains Tax on principal residences.

In this article, Kate Barker, Chief Economic Advisor to the CBI, argues that housing market policies need to adapt to reflect the changing nature of the UK economy. In a flexible labour market with more job insecurity, a stronger rented sector is likely to be needed. But while policies have recently shifted away from supporting owner‐occupation ‐ in particular by reducing mortgage tax relief ‐ there has been a lack of a coherent approach to encouraging affective forms of tenure. The article discusses a number of different policies which meet the two objectives of stimulating a stronger supply of rented housing, while reducing the volatility of the owner‐occupied sector.