Tory win pushes policy emphasis toward home ownership

New Tory government offers little more than ownership initiatives as housing policy priorities.

Prime Minister Boris Johnson

With a Tory win, housing policy shifts to an emphasis on ownership at the expense of social alternatives.

At present the Tories are on course for an 80-plus majority.

Housing Secretary Robert Jenrick retained his Newark seat with 34,660 votes.

Housing minister Esther McVey retained Tatton with 28,277 votes – but her share of the vote slipped slightly.

Over a Tory campaign marked by relatively little engagement with the housing crisis, one commitment gave a strong hint as to what lies ahead – the encouragement of a market in long-term fixed rate mortgages, which could “slash the cost of deposits”.

Post-crash mortgage lending rules were adopted to end risk-taking on loans prospective home owners might struggle to repay.

A subliminal assessment of the manifesto commitment suggests changes are coming to free up lending – with fixed-interest rates offsetting risk.

But that’s a dice-roll should prices fall to plunge buyers into negative equity.

Selling long-term fixed-rate mortgages will have to be a big sell by the new government, which will have to quickly learn lesson of previous failed attempts by lenders to offer such a facility.

Not to mention a big change in the market and buyer attitudes.

And it will soon become evident that cutting deposits for first-time buyers will drive demand into a stalled supply-side problems.

Expect a battle between the new government and economists – including the Bank of England – should the relaxing of affordability rules run into expected trouble.

The ‘get out’ may lie in evidence of first-time buyers being deterred by prices rising faster than they are now.

Pledges on ending Section 21 – or so-called ‘no fault’ evictions – play well to the rented sector, but, realistically, will run into opposition from landlord bodies that have barely bared their teeth so far.

But with the justice system in a spiralling crisis of its own, setting up a housing court could be too much of a rush to judgement.

And maintaining Right To Buy, in the face of all evidence to the contrary, will simply see a further haemorrhage of social housing.

On this, the manifesto offered councils the prospect of using money raised from developers through the planning process to give a discount of up to a third on some of the new homes built.

Boris Johnson went ‘off manifesto’ in pitching the prospect of  government “intervention” to tackle the housing crisis and homelessness.

As with much of what Johnson said on the stump, the concept seemed more off-the-cuff than considered, but the general gist lay in the consideration of  measures to persuade or compel public bodies, including Network Rail, to release thousands of pockets of under-used land for homes.

That would mean changing Treasury rules so that public bodies have the prospect of bigger benefits if they let go of unused land for housing.

And the credibility of Tory housing policy hinges on those 300,000 homes a year they want built – a figure strongly at odds with present and predicted capacity.

The Tory manifesto sees rough sleeping ended by 2024 – set against recent Shelter figures suggesting the highest rate of homelessness in 12 years, with 135,000 children in Britain now homeless and living in temporary accommodation.

Again, on the stump, Johnson offered little more than  “joining up” the agencies involved in tackling homelessness.

Critics see no real investment for social housing in future Tory policy.

Initial soundings suggest the Tories will take on Labour’s 100,000 new council houses a year by 2024 – with faith in the private sector to make their own million-homes plan happen.

In that, those critics see a government unconvinced by its own goals.

Overall, the consensus is that, on housing overall, this new Tory government has some convincing – if not explaining – to do.

As for who’ll be doing that explaining, the prominence of present Housing Secretary Robert Jenrick over the election campaign means a move might be in the offing.

 

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