Another Tory housing gimmick

Cameron’s housing announcement is his latest attempt to wear Mrs Thatcher’s clothes.

David Cameron ncrj

Cameron’s housing announcement is his latest attempt to wear Mrs Thatcher’s clothes

Tory conferences have often kicked off with a prime ministerial housing announcement. This year is no exception. David Cameron has indicated that around 100,000 new ‘starter’ homes will be provided to first-time-buyers aged under 40 years with a discount of 20 per cent on the market price.

Achieving this target is contingent on the Tories being in government come next May of course, so it’s jam tomorrow as so often with such pre-conference announcements.

As he did at the party conference in 2011, when he quadrupled the average discount to £75,000 for the right of tenants to buy their council homes, Cameron’s housing announcement in Birmingham over the weekend is his latest attempt to wear Mrs Thatcher’s clothes as the champion of the ‘property owning democracy’.

It’s worth considering the outcome of Cameron’s ‘rejuvenated’ Right to Buy, which has resulted in the sale of 8,500 social homes with a maximum of 6,400 replacements apparently appearing at some indeterminate future date. This is far from the one-for-one replacement promised by Cameron in 2011 and leaves a shortfall of at least 2,000 social homes.

So responses to this latest housing gimmick should be accompanied with a huge pinch of salt.

The location of the ‘starter’ homes (i.e. very small) just announced will be brownfield sites, mainly in cities and towns, so leaving the Tory countryside free from shouldering its fair share of accommodating the UK’s housing needs, which run at 250,000 extra homes annually for the foreseeable future.

The 20 per cent discount, which will still mean the average price for these homes will be five times the average wage, will be achieved through cheaper brownfield land, by setting aside both the zero-carbon homes standard and developers’ obligations to provide social homes under section 106 planning requirements.

So much for the greenest government in history. And the 5m people on social housing waiting lists will just have to continue to wait.

This announcement is the latest in a series from a government attempting to fill the void where a Housing Strategy should be.

Chart (1) shows the scale of the housing problem with a thirty year downwards trend in the annual number of homes completed. In the last four years, barely half of the required annual number have been provided, storing-up problems for a growing population almost 5m higher in England since Mrs. Thatcher came to power.

chart 1 - homes completed_page_001

Yet we are building far fewer homes for this larger population, which also has a faster rate of household formation due to aging and the growth in single person living. In fact, in 1978, more social homes were built than total homes in 2013 by the private and social sectors combined.

The solution, which is ideologically alien to today’s Tory Party, but not to that of Macmillan, Douglas-Hume, Heath or Major, is to build more social homes, and especially more council homes, as SHOUT has advocated, using public subsidy for bricks and mortar investment rather than lining the pockets of private landlords.

But perhaps that 1 in 4 Tory MPs are private landlords explains the reticence.

Kevin Gulliver is director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research but writes in a personal capacity

16 Responses to “Another Tory housing gimmick”

  1. SimonB

    The rural vs urban “fair share” argument is spurious. Better to consider south east vs the rest. Development needs to be balanced across the regions, along with economic and government bases.

    The wizard wheeze that you have missed is that the few new builds will be subsidised with tax exemptions, including the new Community Infrastructure Levy (replacing Section 106 payments). This money is directly linked to adding infrastructure to accommodate new developments. Essentially the proposals are for local government and utilities to sub the costs. The effect could be simply a rise in council taxes, but if capped it would mean another increment in the running down of council services. Utility prices may rise too, or again we’ll see services further run down so that dividends can be paid.

    It’s another nasty, cynical move when what is really needed is a huge program to build social housing to a good standard across the country.

  2. Dave Roberts

    Immigration?

  3. Leon Wolfeson

    You have no other thought, it seems, other than to blame the Other – and you’d need new targets if you got your way.

    No, there was no systematic underbuilding of houses for 34 years in your world, it’s all the fault of the paying students, the nasty people working for multinationals, etc.

    You are all in favour, of course, of your rich buddies buying up property in London, so let’s not mention that. Oh right, I did.

  4. Leon Wolfeson

    No, the basic issue is it’s “discounts” (as you say, with cash ripped from elsewhere) for houses, which will predominately go (again) to people who can afford to pay a substantial down-payment. Not the people most in need of housing.

    Adding costs to utilities is especially nasty though, I agree, since that will *directly* hammer the poor.

    And of course, as the article notes, there will be no affordable housing built as a result, etc.

  5. Jack

    Who wants to live in social housing? No-one, that’s who. People only live there because they can’t afford anywhere else to live. Take a tour around a social housing estate in any big city and see whether you fancy it.

    Social housing is flawed in concept. It creates areas of economic separation and keeps people trapped in their social and economic strata.

  6. blarg1987

    If you go back to after world war 2 up to the 70’s people who lived in social housing where people in professions such as teaching, police etc.
    If you look at new towns as another example most of them were mainly social housing which are now private thanks to right to buy.
    We have to remove the stigma that has built up around social housing by building more and extending it to a greater number of people.
    Only then can we remove the ideas of economic separation and stigma attached to it.

  7. Leon Wolfeson

    No, that’s your right’s idea of forcing out people who are successful from social housing. It’s your right’s idea, of allowing council property to be sold, leading to it being owned by low-rent landlords.

    “Trap” people by allowing them to afford to have spending money. “Trap” people by allowing them to have a community. Can’t be allowed, oh no, they need to be on housing benefit in a run-down property an hour on the bus from work, and not knowing the neighbours, so if anything goes wrong their only port of call is the state!

    There are perfectly nice mid-rise council housing areas which I’d quite happy live in.

  8. jack

    We all know you live in a shared house in Brent. Do you own that then, and are you renting out the rooms to others? Or do you just rent the whole house from a landlord.

  9. Leon Wolfeson

    All your personalities “know” stuff, eh?

    But oh wait, no, I actually live in Barnet. Who make Brent look like paragons of competence. And no, I do not own property, or rent property to others.

  10. jack

    Ah, is it a community-care type hostel for those with mental health issues?

  11. Leon Wolfeson

    No, I do not live with you.

  12. Gary Scott

    Again, addressing the symptom rather than the problem. Cheap housing, empty housing, housing being demolished in the north of England and in Scotland. Overpopulation in London and the South East is not accidental, this is where the employment opportunities are, when the employment is elsewhere there is no reason to build more housing. The problem has always been there but the advent of right to buy under Thatcher meant an end of easily available rentals at reasonable rents. This lead to London wage inflation and further rent inflation and the housing prices spiralled. There are no controls and no benefits except to landlords. London is being crushed under its own weight while sucking the life out of the rest of the country.

  13. Dave C

    Dear Dave Roberts, During the last Ice Age, the UK was uninhabitable as it was covered totally in thick ice sheet. So just to make a point you are also an immigrant, so to use your analogy, get back to where you came from.

  14. jack

    Let’s dissect the logic of your statement.

    Millions of years ago, the landmass that is now the UK was uninhabitable, and so therefore all human beings in the UK came from sonewhere else.

    Because of this fact, any suggestion that current levels of immigration might have a bearing on housing economics should be dismissed.

    Any economists considering factoring in the possible inpact of inmigration on house prices, housing stocks and land usage should remember the last Ice Age.

  15. JoeDM

    If governments dealt with the fundamental problem of uncontrolled immigration of poor quality people then houses would be available at lower prices.

  16. Kathryn

    There are hundreds of abandoned and boarded up houses in Stratford, London, post Olympics. It’s not just a problem elsewhere.

Leave a Reply