The shuffling of the pack due to take place in the general election on 7th May looks set to produce either a minority government or a multi-coloured coalition. But what will the new House of Cards deal the housing market?
Labour puts their cards on the table, planning to build 200,000 homes a year by 2020. This target is for the parliament-after-next of course, so the relevance to this election is dubious. They pledge to unblock the supply of new homes by giving local authorities “use it or lose it” powers over developers who “hoard” land and also propose more garden cities. On renting, the party proposes to make three-year tenancies the norm, institute an upper ceiling on any rent increase, as well as banning letting agents from charging fees to tenants. And then there’s the mansion tax, which they purloined from…
… the Liberal Democrats, who see Labour’s house building target and raise it, aiming for 300,000 homes a year by 2020. They are also considering getting the government directly involved in building houses, but this is unlikely to be in the 2015 manifesto because… wait for it… they think that the policy would require a long consultation. Which is symptomatic of the housing market in general.
The Conservatives are keeping their cards close to their chest, planning over the next five years to build only 100,000 “starter homes” (exclusively for first-time buyers in England under the age of 40 at 20% below the market rate) and 10,000 affordable homes available at below market rent. The party also proposes a “rent to buy” scheme whereby new-build social housing would be let below the market rate for a minimum of seven years, allowing young renters to save for a deposit to buy the home or move out after that time. They aim also to extend the equity loan part of Help to Buy to 2020.
UKIP’s policy is to prevent immigrants from accessing social housing for five years after moving to the UK and to “prioritise social housing for people whose parents and grandparents were born locally” which sounds simple until you think about it.
And the sector does obviously think about the parties’ policies. At the 2015 PRS Forum, I donned my investigative blogger hat and went in search of delegates for their opinions. I asked one such senior delegate (who shall remain nameless) whether he thought rent controls were a bad idea. He shot back (and I paraphrase) “You might very well think that, I couldn’t possibly comment.” But rather than just avoiding the worst ideas, both left and right have much stronger (if controversial) hands to play.
The left could go all in and declare that they would get the state itself to build more houses. It would cost a lot but the other parties would have to make similarly bold counter proposals to stay in the game.
The right could raise the stakes further (and risk the ire of the NIMBYs) by freeing up supply with a dramatic simplification of the planning system.
The looming housing crisis will not be solved until all players in this House of Cards take bold decisions to increase supply. But as every card player knows, even a winning hand is useless if you are not willing to play it.