One of the greatest challenges that the Cameron/Osborne years struggled to get to grips with is the crisis in home ownership. With home ownership in England now at levels not seen since 1983, it is time to address one of the greatest social problems of our age.
Over the past 20 years, a multiplicity of factors have conspired to breed this problem, including familial changes, people living longer, and of course immigration, creating 3.3 million extra households. And, while it is true that we have failed for many years to build enough homes to keep up with demand, it may surprise you that the number of homes has actually risen at almost exactly the same rate – this crisis is not simply driven by numbers.
This article originally appeared on ConservativeHome (24/08/2016)
The Cameron government took steps to intervene in the market with a range of policies from Help to Buy to Stamp Duty changes and the impact of these is yet to been seen. But undoubtedly more needs to be done for a truly long-term solution.
This is a problem we need to get to grips with, and quickly. Partly because creating a sustainable and stable housing market is critical to our future as a party of government; but mostly because failing to tackle the issue now could prove devastating to the long term social cohesion of our country.
It is unacceptable that in Great Britain today, millions of hard-working, aspirational people, remain unable to realise their dream of owning their homes. A Tory dream our party has always championed. It is disastrous that millions have abandoned hope of ever doing so. That’s not the country I want to live in. The country I do want is one where future generations retain both the aspiration and the ability, to purchase not only a “decent” homes, but crucially, homes which are desirable. Well-located homes, at prices they can afford.
If that sounds like utopia, it needn’t. Theresa May has already called attention to the “housing deficit,” and she has highlighted that young people are finding it “harder than ever before” to own their own home. The real challenge, though, will be creating a sustainable housing market that works in the long term, during uncertain times and when economic conditions are stable; and to do that, I believe we need to reach for bold and creative solutions.
That is why I am leading a call for evidence from the Tory Reform Group looking for a new approach to housing policy. We’re canvassing the whole political spectrum for the best and brightest ideas, and I am already encouraged by the level of responses. What is increasingly clear is that we need different solutions for different parts of the country. This crisis is not national, it is local.
Consider this: the most expensive borough to live is Kensington and Chelsea, where the average house costs £1.27 million; by contrast, in Burnley the average house is 18 times cheaper at £69,000 and prices fell five per cent last year. And, while private rents in London continue to increase at inflation busting rates, in Wales and Scotland they have begun to fall. For most, £69,000 would be considered an affordable home, but with average first time buyer in London paying £385,000 can a national solution really be the answer?
While it would seem to make sense to increase density in London, does changing the rules to achieve that work if it leads to more new builds in Stoke-on-Trent? Do we need to rebalance our population away from the South-East; what role does government have in delivering this? Should we continue to protect green belt at all costs, or just seek to prevent ribbon development, by re-designating green belt in areas with the most pressure?
With a population growing at 600,000 a year, the equivalent of a new Glasgow every year, we must surely need at least one new town? Connected via one of the great transport links already in the underway – Crossrail 2, HS2, – but making the best of global technology solutions to not only be an eco-town but a desirable place to live and a practical place to work with the fastest of super-fast broadband, great schools, outside space, shops and community facilities? Can that be delivered without central government imposition?
Some would argue that we simply need to build more homes, “whatever the tenure”. While it is true that we have failed to build quickly enough, we can’t fall prey to a crude numbers game.
Planning regulations, skills shortages and financial restrictions are all holding up building, but there are other complex factors at work. Yes, we need to build more homes. But we also need to ensure those homes meet people’s needs. Homes people can take pride in, and enjoy living in. Desirable homes, in desirable places.
And what about saving that crucial deposit? The Lifetime-ISA (LISA) is an innovative way of helping ‘young’ savers, but falls woefully short of the challenge faced by many in their first years of work – paying off student loans, facing extortionate rents, being encouraged (and now forced) to save for retirement – a triple whammy that puts today’s graduates in the position of an additional 13 per cent marginal tax before they even begin saving for a home. One solution might be to allow first-time buyers to use their pension pot as a security deposit to buy a home, allowing the incentive to save, but not – as the LISA does – wiping out retirement saving at the point of purchase. But I’m keen to hear more ideas to solving the deposit conundrum.
So, this call for evidence is a chance to draw on the work of experts, and ideas of individuals, to create concrete proposals that offer practical solutions to deliver affordable home ownership, decent rental accommodation, and a sustainable housing market fit for the 21st century. The aim is to help establish a long-term housing plan that delivers not only for today, but for generations of home owners and happy renters.
Please, get involved in shaping that output. If we can get it right, then generations of voters will back us. Get it wrong, and millions will never forgive us.