A mixed bag
4 Oct 2013
David Cameron opened his Conservative Party Conference speech with the promise of home ownership.
“This week in Manchester we’ve shown this Party is on the side of hardworking people. Helping young people buy their own home.”
The rhetoric is right. And it is fantastic to see all three party leaders recognising the urgent need to tackle our housing crisis. Unfortunately, we still cannot agree with the Government’s proposed solution.
Cameron used the Conference to accelerate the Help to Buy scheme. The Prime Minister argued that those struggling to accept the viability of scheme are ‘[trashing] people’s aspirations to get on the housing ladder’.
In reality, Help to Buy does little to help these aspirations. As Toby Lloyd, Shelter’s Head of Policy remarked yesterday on Radio 4: Help to Buy will continue to price out the people who need help most.
Almost 8 in 10 of England’s low to middle income families will still not be able to afford a family home with a 95% Help to Buy mortgage. While the mortgage indemnity part of the scheme lowers the deposit amount, with house prices so high the monthly payments are still unaffordable. And probably wouldn’t pass most lenders sustainable lending criteria.
This part of the scheme also breaks the link with building new houses. It risks boosting demand but not supply. As observed by the Economist (and countless others) “First-time buyers would be better served by policies that boost affordable housing supply…”
However, Ministers did passionately acknowledge that our housing crisis is becoming a generational crisis. “For most young people today, their home is their landlord’s. Generation Y is starting to become Generation Why Do We Bother?”
As young families are priced out of homeownership they are left to bear the brunt of our poorly regulated, unstable private rented sector. It was therefore promising to see the Government taking an important first step.
Secretary of State for Communities and Local Government Eric Pickles used his platform speech to promote new measures that will encourage ‘family friendly’ tenancies in the PRS. The Government’s proposed ‘Tenants’ Charter’ is designed to raise standards and improve stability in the sector. This is the first time that the Government has openly recognised the need for wholesale reform and it should be welcomed.
Conservative members and activists also articulated mounting concern at the state of our housing market. The audience of Shelter’s Manchester fringe event was particularly illustrative of this.
Questions from the floor focused on the growing number of generations all living under one roof; the devastating impact of rogue landlords; and the inability of local councils to build. There was a clear feeling that poor housing is holding back millions of people.
This year’s party conferences confirmed that housing is a universal concern. If politicians talk about the housing crisis in a language voters can understand they will capture new supporters. But until they announce bold policies to get more, genuinely affordable homes built they will not create the land of opportunity promised in Cameron’s speech.