I make no apology for returning to the residential market this week because what both major political parties are saying is now significantly different.
For the government, housing secretary Michael Gove continues to assure us he is bent on building more homes but what he says simply does not reflect what he has done. He must know that by removing the mandatory requirement on local planning authorities for a five-year land supply plan, and reducing that requirement to advisory, he has cut the number of houses that will be consented next year by at least half if not more.
It is clear the government believes voters care more about new-building close to existing communities than they do about the people who might actually live in those homes were they ever to see the light of day. It is a defensible position, but not an attractive one particularly for anyone desperate for a home of their own or worried about the prospect of their children ever being able to own one.
What is new is we now know more about what a future Labour government would do according to leader Sir Keir Starmer. He has pleased housebuilders by confirming that his government would reinstate the requirement for a mandatory five-year land supply and surprisingly set Labour at odds with another Tory shibboleth, which is that other than in very rare cases the green belt is sacrosanct, by also committing to building in the green belt in direct contrast to the Tory position.
Expect Sir Keir to clarify that he doesn’t mean the green belt is effectively scrapped, but this is a shrewd recognition that there’s quite a lot of the green belt that is not particularly green and frankly there are also a number of local authorities which, if they are going to provide enough housing to satisfy demand in their patch, are going to have to sacrifice some green-belt sites to do so.
More to the point, while the Tories called the mandatory land supply an example of Stalinist top-down dictatorship when it first appeared in the 2008 Planning Act, they have done nothing until now to scrap it because, Stalinist or not, the policy has worked.
Right to Buy push
There are still areas where the government can make a positive impact. Now that councils can keep the proceeds of council house sales, the government would be crazy not to use the next 12 months to give Right to Buy a big push. Labour has never liked the idea and could point to how the early version of the scheme reduced the amount of affordable housing. That no longer applies. Councils now have a duty to use the proceeds of Right to Buy sales to provide new stock to help those on a housing waiting list so they create both new homeowners and new affordable housing, too.
Looming over all of this, of course, is the massive increase in the cost of financing home ownership, the impact of which is going to be felt by hundreds of thousands of borrowers as they come off low fixed rates. Goodness knows how many will be forced into throwing the keys back, and in my view much of this pain could and should have been avoided.
The Bank of England appears to get every big call on the economy wrong these days. In the past, if inflation rose because wage increases fuelled price increases, the bank raised interest rates to choke off demand. If consumer demand was sluggish, the bank lowered rates to stimulate more spending.
But this inflation is caused by a fighting war in Europe, pure and simple. Consumers are already horribly stretched by sky-high energy and food prices. The slavish obsession with mirroring the US Federal Reserve’s interest rate policy is insane and the sooner the chancellor steps in and forces a downward change, the better for all of us.
Steve Norris is chairman of Soho Estates