With the election outcome having upset the forecasts of almost all of the major pollsters, I imagine several political parties will be re-thinking which polling companies they should look to engage next time as they attempt to gauge the public mood when we do it all again in five years’ time – assuming this government make it to 2020.
From the housing market perspective, the potential threats that a potential Labour government would have looked to impose around rent controls and the imposition of longer term tenancies would appear to have been removed. Buy-to-Let has been one of the growth aspects of the housing market since the recovery began two to three years ago and the threat that these relatively radical policies posed may have had a significant dampening on investor appetite, and could have even lead to existing investor landlords exiting the market placing further pressure on an already under-supplied housing market.
The new initiatives put forward by the Conservatives look positive on paper. The plan to build 200,000 new home for first-time buyers on brownfield sites at a 20% discount to market are welcome. But the industry, and mortgage lenders in particular, need to see the detail to ensure that funding solutions can be developed that allow the target audience to actually purchase these properties assuming they can be built. One of the key planks around the new build agenda is the National Planning Framework and the commitment from local authorities to put together a plan for new housing over a 10-year period, something legislation says they should all have, but where only around 50% of them have delivered.
The extension of the Right to Buy scheme is contentious and divides opinion, with both the Welsh and Scottish assemblies having said they will end the current scheme. Many industry commentators feel it is morally wrong to sell off what is often termed “affordable housing” stock at a discount to market but this has been a central plank of Tory policy for over 30 years and is intended to reverse the fall in home ownership that has taken place in recent years.
The intention to replace every property sold off under the extension of the right to buy scheme, be that local authority or housing association with a newly constructed replacement property is a laudable ambition but the government track record on this has fallen woefully short on delivery, therefore delivering this will require significant resources and political will
Initiatives such as Help to Buy have been hugely successful in enabling first-time buyers and home-movers with relatively modest deposits from, once again, accessing home ownership. The Help to Buy Mortgage Guarantee initiative, backed by government, is due to end in December 2016 so unless mortgage lenders take the initiative and use the private insurance market to replace those guarantees, we may see a reduction in the number of high loan-to-value, low deposit mortgages available, and therefore, at present, it looks as though we will need government to continue to provide those guarantees for high LTV (95% ) lending beyond its current end date.
The Help to Buy Shared Equity scheme has been extended to 2020 which should provide some assurance to developers, but again, a five-year time-frame is not really a strategic period and we need to be thinking further ahead.
The Housing Minister post should be Cabinet position, working closely with and in alignment with other stakeholders including the DCLG, Treasury, DOE, Local Authorities, Developers and the Council of Mortgage lenders to develop a cohesive Housing Strategy for the next 10, 15 and even 20 years. We need to be thinking longer term, generational planning, not parliamentary term.
Our demographics are changing and are forecast to change further. We are all living longer and, in general, people are moving far less frequently. We have an above average divorce and/or separation rate compared with our European neighbours and, as a consequence, that often means the formation of another household when our housing stock is growing only marginally.
We also need to start the debate about further changes to our planning laws and in particular about the ability to build on some areas of our green belt, unpalatable though that is to many, as everyone should have the right to a decent home, be that as an owner-occupier, private tenant, council or housing association tenant or any other tenure.”