Tory plans for Help-to-Buy are a dangerous distraction from our real housing needs

Whatever Theresa May says in her speech today, the Conservatives have got their priorities wrong by pumping billions into counterproductive housing policies.

Less than a fortnight since local government Secretary Sajid Javid promised a Green Paper on social housing, he published an article in Sunday’s Observer laying out Tory plans: ones which played to a rather different audience. 

And despite promises mooted today, the Tories have played to party activists in backing a £10bn boost to the Help-to-Buy scheme.

Those who attended the National Housing Federation conference in Birmingham on 18th September were heartened that social housing appeared to be back on the government’s agenda in the wake of the Grenfell Tower tragedy.

And there was hope that the Green Paper announcement marked a pivotal moment when social house-building would move to the top of the political agenda.

But plans on Help-to-Buy equate to allocating yet more resources to stoke demand for home ownership, increasing house prices yet further – without directly building a single new home.

The promised £10bn could build at least 250,000 social rent homes, when borrowing by social landlords to top-up public subsidy is taken into account.

This would make a weighty contribution to the one million new homes by 2020 promised by the Tories back in 2015. Even that pledge falls short – the DCLG housing need calculation methodology points to a need for 266,000 home needed every year, while some housing market observers say that the real figure is closer to 300,000.

In reality, of course, Tory promises are illusory. Only about 290,000 homes have been built in the last two years, meaning 240,000 homes are needed in each of the next three years just to meet the one million home target.

Looking back at historic house-building trends exposes how difficult it is to reach 200,000 homes annually – let alone 266,000, without a mass programme of social house-building contributing at least of half of the building programme.

During the 1946 to 1979 period, for example, 51% of 8.4m new homes (250,000 yearly on average) were provided by social landlords – local councils and housing associations.

Since then, just 19% of the 5m completed homes (an average of 150,000 per year) have been social rent.

As the chart shows, at no time in the last three decades has house-building topped 200,000 annually, and from 1946 onwards, this was only achieved with a substantial contribution by social housing.

And while May’s words on council housing today offer some encouragement, the £10bn going on inflating a dangerous Help-to-Buy policy would be much better spent through investing in new council properties.

These are the essential truths that the Tories either fail to, or don’t want to acknowledge. Boosting Help-to-Buy is a worrying distraction from new public investment in social housing – and one which affects the whole sector.

Wrong priorities will only mean social housing will continue to decline, precariousness among social tenants will rise, targets will go unmet – and affordability of housing across the board will worsen further.

Kevin Gulliver is Director of Birmingham-based research charity the Human City Institute, and is former Chair of the Centre for Community Research. He is part of the SHOUT save social housing campaign, but writes in a personal capacity.

3 Responses to “Tory plans for Help-to-Buy are a dangerous distraction from our real housing needs”

  1. Craig Mackay

    You’re absolutely right about the contribution of the Help to Buy scheme to general house price inflation. What we need is to build more affordable homes. The charge in your piece is quite shocking. Not only has council house construction virtually ceased but the private sector seem to be building fewer houses than ever before. The big problem we have in winding up the production level is there simply isn’t the manpower available in the UK even without worrying about the consequences of a hard Brexit. We have to use different and novel methods of construction which are fast and cheaper yet provide good quality homes. That is something that the poor have not had much of with houses in the UK built today to be smaller and more pokey than anything we have built for a generation. You can read more about that here: http://outsidethebubble.net/2017/10/04/may-hem-in-the-housing-market/ and more details about some of the complexities of such a building scheme here: http://outsidethebubble.net/2017/06/22/solving-the-housing-crisis-a-fairer-deal-for-all/

  2. patrick newman

    Last year according to the DCLG only 2100 council dwellings were built in England. About 12,000 were sold off at enormous subsidy. Help to buy is just a subsidy to the well off parents of young professionals temporarily short of a bob or two! It can however add another upward twist to the spiral of house prices.

  3. Dave Roberts

    There are a number of factors why the housing crisis will never be solved, and we have always had a crisis in one shape or form. Among them are the fact that while people can do useless degrees in things like David Beckham there has been a thirty year lack of training of bricklayers, carpenters, plumbers and plasterers along with every other building skill. The workforce doesn’t exist.

    Then where are these houses to be built? Either land has to be requisitioned from the private owners or we build on green spaces. There is a drastic shortage of available land to build where people want to live which is where they work which mean the south east and in particular within the M25.

    And of course, where is the money going to come from? This is the easiest actually because all that is needed is the basic rate of tax can be raised to about forty per cent except that there is no government that is likely to do that. I really would like some answers instead of the usual rhetoric from the writer of this article.

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