An emotive election issue

As polling day approaches, housing is set to become one of the chief political battlegrounds with politicians of all stripes emphasising short-term, headline-grabbing policies faster than you can say ‘housing crisis’.

A persistent shortage of homes, against a background of strong house price growth in some areas and increasing affordability pressures on younger would-be buyers, is likely to lead to heated debates ahead of one of the most uncertain elections for decades.

Labour’s plans to levy a Mansion Tax on properties worth £2m or more has so far attracted the greatest controversy, even among the party’s own London MPs. But there is more debate to come.

"Election-focused soundbites will not deliver a better functioning market"

Another topic we can expect to dominate the airwaves, is the argument surrounding empty homes in London. Despite the lack of robust evidence that this is a large scale problem, Labour recently announced plans to levy charges on absentee property owners but details have yet to emerge.

Less controversial are measures from all sides aimed at increasing the number of first-time buyers. The Conservatives intend to build on the already extended Help to Buy policy with the new Starter Home scheme (see Table 2) while Labour has gone further stating an intention to double the number of first-time buyers by 2025. In a country where homeownership remains a major aspiration, this is safe political ground.

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Unfortunately, election-focused soundbites will not deliver a better functioning market. At best, welcome measures to help first-time buyers, are only part of the solution. At worst, policies launched without real research into their consequences could have adverse effects on the market.

A heavy-handed approach towards overseas buyers risks hindering investment and inhibiting house building rather than helping to deliver more homes. In its current form, Mansion Tax is likely to distort the property market and penalise certain parts of London where values have risen steeply.

What the housing market really needs are long-term solutions that extend beyond electoral cycles and party politics. As we can see from Graph 4, the planning reforms of the last three years, have helped deliver a greater number of planning consents. Housebuilding now needs to catch up.

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We need to support a wider range of players (small enterprises, housing associations and Local Authorities) to deliver homes which are not only for sale but also aimed at renters and people struggling to buy.

We also need to have an honest debate on taboo subjects such as the green belt – a no go area ahead of an election particularly in marginal constituencies. Long-term solutions require cross-party support.

The good news is that behind the scenes, there is a growing consensus among all major parties that the country needs more homes. If the current opinion polls are correct and we end up with either a minority government or another coalition, 
we will need to build on that.

Taken from
Residential Property Focus Issue 1 2015