Before I sat down to write this article, I went for a short walk around my local area. I am a child of Metroland. I was born in Watford, grew up in Croxley Green, and went to school in Moor Park. I take the train into Baker Street most days and have a girlfriend in Amersham that I wooed through quoting John Betjeman. Lucky lady. Nevertheless, in short, I am about as a suburban as you can get. Well, outside of those cliched Dursleys from J. K. Rowling’s abominably successful Billy Bunter rip-offs.
I am also recently out of university, living with my parents, and keen to get on the housing ladder. So anything I write on housing naturally comes laced with the bitterness associated with the colossal problem young people now face in getting a house. Homeownership levels have fallen from 71 percent in 2003 to 65 percent last year. Yet in the 1990s, up to 36 percent of 16–24-year-olds owned their own home. That has fallen tenfold to today.
The political consequences for this for the Conservatives are obvious. At recent elections, a clear signal of how you are likely to vote has not only been age, Brexit vote, or geographical location, but your housing status. 57 percent of those who owned outright and 43 percent of those with a mortgage voted Tory in 2019. 45 percent of social renters and 46 percent of private renters opted for Corbyn. For the Conservative Party to survive, we must have more homeowners.
This is a fact the Prime Minister has long realised. He made the need to increase home ownership a centrepiece of his conference speech to ConservativeHome readers back in 2018. The Conservatives have made some progress in the last twelve years. Help to Buy was a centrepiece of George Osborne’s time as Chancellor. Housebuilding has reached a 30-year high year, and Rishi Sunak announced fixed-rate, long-term mortgages in his last budget which featured in the 2019 manifesto.
So yesterday’s announcement of the extension of the “right to buy” to housing association tenants and the suggestion that housing benefit could be contributed towards mortgage payments came in a tradition of action. As well as striking the right Thatcherite notes, they show a commitment to helping those on low incomes get onto the housing ladder. Since housing benefits cost the Government around £30 billion a year, reducing that bill also opens fiscal headroom for long-heralded tax cuts.
Yet there is an obvious sense that the Prime Minister and Michael Gove are tinkering whilst Rome burns. As Lisa Nandy has pointed out, there is no sign that the lenders are willing to agree to provide mortgages for those on housing benefits, especially as those receiving them have low levels of savings. The Government’s policy therefore appears to use tax-payers’ money to guarantee banks’ ability to lend to those who otherwise wouldn’t be able to buy houses. The 2008 deja vu is palpable.
This all comes as a paper published yesterday by the Centre for Policy Studies argues that the benefits system is “biased” towards keeping people as tenants. It says that only 2.3p is spent incentivising home ownership among low and middle earners for every pound that subsidises renting. The report says that enabling more people to buy their homes would achieve long-term savings for the Treasury of £140,000 for every house sold. So taking action might have genuine public spending benefits.
Yet despite internal estimates suggesting this programme, to be fully effective, would cost £3 billion, the Government’s desire to fund this without any new spending, the budget will be capped at £500 million. That seems laughable, especially if Gove wants to replace every housing association property sold. The Centre for Policy Studies suggests 2.3 p is spent incentivising home ownership for every pound subsidising renting I’m sorry to tell the Cabinet but changing that will be expensive.
So why has the Government chosen this flawed form of help? Partially, this is the latest demand-side top-up by the Government ahead of a potential cooling in house prices. As Ross Clark has pointed out, the Government has always intervened to prevent a house price crash – music to the ears of us twenty-somethings, I’m sure you’ll agree. But, more importantly for the Government, these policies give the impression action is being taken, whilst swerving what we really need: mass housebuilding.
This is not a rant about NIMBYs, lambasting selfish homeowners opposed to development in the interests of keeping their house prices high. Polling suggests rising house prices are very unpopular. Only 5 percent want to see them rise, whilst 75 percent want them to remain stable or fall. Opposition to development comes because fewer than 10 percent have faith in the planning system or developers – and almost 80 percent are worried about the impact of development on their quality of life.
All this is understandable. Nobody – whether a long-standing resident or a first-time buyer looking to move in – would want to live somewhere with ugly architecture, over-burdened transport infrastructure, packed schools, and stressed public services. So, a lot of emphasis has been placed in recent years on encouraging local people to take back control from our sclerotic and ludicrously complex planning system to enable development that has the consent of local residents.
Yet I have always been sceptical about the whole street votes idea, with local plans and payments for residents. A bit like “levelling up”, it is a nice concept that gives the illusion of a squared circle where one does not exist. In practice, street votes would not carpet the land in endless lovely Georgian terraces. The idea is too small scale and too slow. It would not deliver the huge housebuilding programme we really need.
As nice as it would be to try and turn the entire country into Bath or Richmond Park, that is not the priority. Estimates suggest we need up to 340,000 homes to be built a year to tackle the housing crisis. In 2020/21, we built 216,000 – far below the Government’s target of 300,000. Even that represents the culmination of a decade’s uptick from 2010’s low of 135,000. Compare that to the post-war high of 415, 450 in 1968.
Back then almost half of homes were built by local authorities. Gove’s keenness for a one-in-one-out policy for “right to buy” sales reflect one on Thatcherism greatest failures. As wonderful as it was that the Conservatives gave millions the chance to buy their own council house, the prices of remaining social housing remains too expensive for many residents to buy – and yet many a young renter shelling out half their wages renting privately are desperate for the sort of council house their grandparents had.
Of course, this is not the only factor. House prices have risen globally in recent decades due to low interest rates. But whilst the average in richer countries has been a doubling, prices in the UK have tripled. Our Byzantine planning system, pointless Green Belts, rocketing immigration, the rise of second homes, land banking, market concentration, and overseas buyers: all have played their part. Yet the central consequence has been a supply-side failure exacerbate by demand-side tinkering.
We were promised, in the 2020 Planning White Paper, “Radical reform unlike anything we have seen since the Second World War”. Yet its Housing Bill and its associated algorithm were killed by opposition from MPs such as Neil O’Brien and Andrew Griffiths – both of whom are now, incidentally, playing a leading role in creating housing policy – and the Lib Dems winning in Chesham and Amersham. Gove was not so much appointed as Levelling Up Secretary as ‘Minister to make the problem go away’,
Readers, my generation are not natural Marxists. Amid the pandemic, there began a global migration of millennials from the centre of cities to the suburbs. Record numbers of Londoners left for Metroland and beyond, whilst 90 percent of America’s suburbs grew. Suburban life is written off as tawdry and tedious, a hell of small-minds, petty prejudices, and Abigail’s Party. But for the vast majority, it still represents an ideal of comfort, security, and home.
Hence why someone like me despairs that the first home my parents bought (and that I lived in) in a friendly, well-connected village like Croxley Green has quintupled in price in the last twenty-five years. Making that suburban dream a reality – and ensuring the Tories have at least some support in twenty to thirty years – will require action of a vast and radical scale. Revive the plans for a million homes between Oxford and Cambridge and build Metroland 2.0 far out into Buckinghamshire.
A pipe dream? If Conservative MPs are only willing to talk a good game on the housing crisis but fail to deliver meaningful reform, then both will remain so. What is needed is a great clunking fist, a housing tsar appointed to produce 300 to 400,000 homes a year by hook or by crook. Churchill did something similar with Macmillan. If Gove and Johnson really want to help young people get onto the housing ladder, they would imitate their post-war predecessors. But that remains an idle fantasy.
Then again, buying your own home remains an idle fantasy for most my age – and soon, so too will voting Tory.