While Help to Buy is certainly not short of critics in the world of economics, the assumption that boosting house prices makes good politics has so far held.
But new Shelter/YouGov polling published today – as part of our At What Cost? report – overturns that widely received wisdom, showing the majority of the public now don’t actually want house prices to rise any further.
Numerous commentators including Martin Wolf in the FT, Russell Lynch in the Evening Standard, and the Adam Smith Institute on Radio 4’s ‘The Report’, have all criticised the substance of the initiative while acknowledging the political benefits. In Martin Wolf’s words:
“The victims of this vile system are the young and upwardly mobile, who are either unable to buy at all or are trapped in a lifetime of debt serfdom. The political genius of the scheme is that it appears to help these hapless victims, while in fact helping the usual suspects: banks, homeowners, Nimbys and, if it creates another housing boom, the government”
Once upon a time a house price boom might have counted as a smart trick in the political playbook. But now, when people are worried about how their children are going to afford their first home, ever increasing house prices just make home owners anxious.
As our report reveals, a YouGov online poll of 4,500 respondents this month found that the majority of people in Britain (66%) now say that they don’t want house prices to rise any further over the next few years. This is an increase even on June 2013, when 58% said this. It is notable that attitudes have shifted dramatically during a period when Help to Buy has been all over in the news.
YouGov asked about peoples’ attitudes to house prices in Britain over the next few years. They found:
• Even among outright home owners (those without mortgages), more people want prices to stay the same or fall than want them to rise (67% vs 28%).
• The age group who most support stable or falling house prices are those aged 60 or over. This could reflect an anxiety over their grandchildren’s future prospects and fear of the consequences of boom and bust based on their own experiences.
• Support for stable house prices is almost universal – geographically, politically and by age. However, those more likely to want prices to rise tended to be in their forties, earning over £40,000 a year, and owned their homes with a mortgage.
• The majority of Daily Express (65%) and Daily Mail (66%) readers would prefer house prices to either go down or stay at their current level.
• The trend holds regardless of voting intention – around two thirds of both Conservative voters (65%) and Labour voters (66%), and almost three quarters of Lib Dem voters (73%), would prefer lower or stable house prices.
Shelter have long warned that high house prices threaten to push the dream of home ownership further out of reach for low-and-middle income families – and it seems the public agree. This all speaks to a wider anxiety that parents have that their children are set to do worse than they did – something the Government’s Social Mobility and Child Poverty Commission look set to confirm this week.
Indeed voters seem to agree with the former housing minister, Grant Shapps when he said in 2011 that Government should aim to “usher in a new age of house price stability”.
Taxpayer-backed mortgages like ‘Help to Buy,’ therefore, represent not only bad economics but bad politics for the Government too.
The only way to meet the public’s housing needs and aspirations in the long term is to achieve house price stability by ensuring responsible lending and addressing the huge shortage of affordable homes.
In an age of stagnant wages and anxiety over the future, the old political certainties may no longer hold true.