New government must take rapid action on housing – Mortgage Strategy

It is a fact universally acknowledged that the UK has a housing scarcity urgently in want of consideration. Most folks additionally agree the disaster can solely be solved by a government with a possible long-term plan for delivering sustainable, inexpensive properties, in partnership with the non-public sector. Calls for action have been rising progressively louder through the years and now echo throughout the political spectrum.

National House Building Council (NHBC) figures printed on 13 May present that solely 26,240 new properties have been accomplished within the first quarter of 2024, down 13% on a 12 months in the past and a rustic mile away from the 300,000 a 12 months promised by the mid-2020s within the final government manifesto. These paltry figures have been blamed on increased mortgage charges and ‘the climate’. But there are far deeper structural points at play, together with the planning regime, environmental regulation, central and native funding, political will…the checklist goes on.

The build-up (no pun supposed) of our property deficit has been a few years within the making. It is 27 years since Tony Blair got here to energy promising ‘joined up government’, putting housing on the centre of his coverage programme, and 20 years since his government commissioned Kate Barker’s housing evaluate, which was the primary to establish the necessity for 300,000 new properties per 12 months to satisfy the wants of the populace. The Conservative/Lib Dem coalition described the state of UK housing as ‘dysfunctional’ in 2010, then presided over a 35% reduce in government funding for housebuilding (together with a 44% discount in social housing funding). Since 2015, the Tory incumbent has launched a controversially punitive tax regime for buy-to-let landlords and launched some schemes to assist first-time consumers, however achieved little to handle the underlying points creating the continual undersupply of property.

In truth, Kate Barker has this 12 months joined one other (non-public) fee to handle the housing scarcity. Little surprise she describes it as “miserable” that most of the issues she recognized in her 2004 evaluate stay, and says {that a} “pragmatic overthink is overdue”. 

The pragmatic ‘overthink’ must be daring and far-sighted. The fact is that no government is ever round lengthy sufficient to place actually long-term plans into impact. They are, maybe inevitably, pushed by the short-term pressures of press and public opinion on what is occurring proper now, and it’s powerful for them to take politically unpopular selections. But if we’re to repair the housing disaster in a sustainable means, and ship ample first rate properties to the owner-occupiers, non-public and social tenants of at the moment and tomorrow, we have to look not simply past the 5 years of the subsequent Parliament post-election, however to the subsequent 50 years.

That is an actual problem. The subsequent government may have loads on its plate to type out, together with decreasing carbon emissions; making our properties extra energy-efficient; securing the vitality provide; well being and social care provision; public transport; cleansing up the water provide; massive infrastructure initiatives equivalent to faculties and hospitals, and the small matter of making certain the safety of the UK in an more and more turbulent world.

All of those points are urgent and the diploma to which they’re prioritised will rely on a variety of influencing elements. But it absolutely is smart – virtually and politically –   to acknowledge how essential housing is, each as probably the most fundamental wants we now have as people and probably the most aspirational wishes. Ensuring that everybody has entry to first rate lodging with ample safety of tenure, whether or not owned or rented, ought to be a minimal goal. Encouraging extra folks to turn out to be owner-occupiers additionally is smart, not simply due to the peace of thoughts and monetary advantages it brings, however as a result of it fuels aspiration throughout our working lives and offers safety in retirement, whereas relieving the government of the price of supporting a rising pensioner inhabitants in non-public rented lodging.

Of course, the unintended consequence of selling owner-occupation is usually a lift to deal with worth inflation – until it’s accompanied by a major improve within the variety of properties being constructed.

A brand new administration must deal with the availability/demand imbalance plaguing our housing market as a prime precedence. It ought to use the reams of housing market analysis already carried out by quite a few cross-party commissions as smart blueprints for action, relatively than losing time on a brand new raft of White Papers analysing the identical points. Appointing a devoted housing minister and maintaining them within the position for greater than 5 minutes could be universally acknowledged as place to begin.

Kate Davies is government director on the Intermediary Mortgage Lenders Association