Why housing delivery is rising ever higher up the Conservative Party's policy agenda

Ministers are clear that tackling the housing crisis is critical to the Conservative Party's prospects at the next general election, but some warn that the flagship housing announcement made at the party's annual gathering risks worsening affordability issues.

Javid on the housing crisis: “If we don’t grip it, then Labour will run away with this issue”
Javid on the housing crisis: “If we don’t grip it, then Labour will run away with this issue”

The outcome of the snap June general election, which saw Jeremy Corbyn's Labour Party make unexpected gains and left the Tories governing without a majority, has forced housing even further up the political agenda. This week's Conservative Party conference in Manchester saw senior ministerial figures warn that convincing voters that the party has the answers to the housing crisis is critical to its success at the next general election. The party's annual gathering began with an announcement that the government would plunge an additional £10 billion into the Help to Buy scheme in a move intended to reach out to younger voters.

What has spooked Conservative Party strategists are figures which demonstrate a massive swing to Labour among private renters in this year's general election. Data from pollster Ipsos Mori shows that Labour had a lead over the Tories of 23 points among private renters this time around, up from 11 in 2015. In 2010, the Tories had a slight lead over Labour among private renters, according to the firm's data. An analysis by rival polling firm YouGov shows that Labour had a huge lead over the Tories among voters in younger age brackets, finding that the "tipping point" age at which voters were more likely to vote Conservative than for Labour had moved from 34 years old at the start of the campaign to 47 at the exit polls.

The message this week from ministers on the party conference fringe was that the government sees tackling the housing issue as the top domestic priority for the party. "If we don't get this right as a Conservative Party, we will have an issue at the next election," housing and planning minister Alok Sharma told a fringe session organised by website ConservativeHome. "The reason why people will superficially find some of the things Corbyn is saying attractive is because, if they don't have skin in the game, they might as well listen to the guy."

Later, communities secretary Sajid Javid told a fringe session organised by think tank the Legatum Institute that the housing crisis is now "the biggest domestic issue facing us". "If we don't grip it, then Labour will run away with this issue with some of those simplistic ideas," he said, pointing out that house prices exceed average annual earnings by a factor of more than ten in more than 30 per cent of local authority areas. Matthew Elliott, the former boss of Vote Leave, the official Brexit campaign in the 2016 EU referendum, went further, warning that widening gulf between those who own homes and those cannot afford to do so risks shaking the public's faith in capitalism. "You can't be a capitalist without capital," he said. "I think that it is one of the key reasons why, at the last election, the Conservative Party lost so many voters in the under 45 category."

On Monday, chancellor Philip Hammond announced an extra £10 billion for the Help to Buy housing loan scheme, which allows people to buy a new home with a deposit worth only five per cent of the cost and a low-interest equity loan from the government. The chancellor said that the move, which as Planning went to press was the key housing-related announcement to emerge from the conference, would help an estimated 130,000 more homebuyers "over the next few years" and renew the party's commitment to Britain's "property owning democracy for the next generation".

The announcement has split opinion. Steven Norris, the former Conservative cabinet minister, told a fringe session organised by new centre-right blog Unherd that the plan is "simply economically illiterate" as it would inflate house prices. "If you increase demand and you don't increase supply, then prices rise," he said. Free market think-tank the Adam Smith Institute, meanwhile, warned the move is like "throwing petrol onto to a bonfire".

But others said that the policy, launched in 2013, had played an important role in increasing housing supply. David Thomas, chief executive of housebuilder Barratt, said: "If there was no extension of Help to Buy, it'd be pouring water on the fire, so I think you can take your pick." He said that the policy had seen housing numbers rise "very sharply" since its introduction in 2013, attributing as much as 20 per cent of the increase to the loan scheme. "It has taken UK housing from a position where it was on its knees, producing 90,000 homes per annum, to a position where we are producing significantly higher volumes." Natalie Elphicke, chief executive of government-backed think-tank the Housing and Finance Institute, agreed. She said: "Without Help to Buy, that absolute recovery of housebuilding would not have taken place. It has been absolutely instrumental in building confidence across the housebuilding industry."

Sharma, who was appointed in June, told the Conservativehome fringe session that he saw a key part of his role as delivering the proposals in the February housing white paper. "There are lots of things that we are trying to do. But what is really important as well is for us to deliver on announcements that we have made in the recent past," Sharma said. "I genuinely believe that (the housing white paper) is a fantastic blueprint for fixing the broken housing market, and that includes the planning system. For me, what's really important is that we go through and deliver precisely what's in (the paper)."

CONFERENCE NEWS IN BRIEF

New Tees Valley mayor Ben Houchen has signalled that he intends to push ahead with a campaign pledge to build a new garden settlement to meet growing demand for new homes. He told a Policy Exchange fringe session that he had just agreed a joint piece of research with the government's Homes and Communities Agency and Department for Communities and Local Government to look at a new garden town of 15,000 homes on Teesside.

Housing and planning minister Alok Sharma has ruled out forcing councils to ballot residents before carrying out estate regeneration projects, saying that he prefers "collaboration" over "combat". Responding to Labour's plan to require tenants and leaseholders to approve regeneration projects through a vote, Sharma said: "This has to be a process of collaboration rather than combat. That's how you get things done."

The planning system has failed to plan for the number of homes needed "for decades" and too much control is given to those who oppose new developments, communities secretary Sajid Javid has said. He told the conference that the inability of young people to access home ownership is "a national outrage" and "the biggest barrier to social progress in our country today".

Chancellor Philip Hammond has announced an extra £300 million to "future-proof" the rail network in the North. He told the conference that the cash would ensure High Speed 2 infrastructure "can link up with future Northern Powerhouse and Midlands Rail projects while keeping open all options for services through Manchester Piccadilly".


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