Arthur takes a look at the ever evolving policies of Housing Minister Gavin Barwell MP.
Owning your own home. That is what much of society aspires to and it was central to David Cameron and George Osborne’s plan for the economy. Under Osborne’s tenure, the Treasury promoted schemes such as Help to Buy and Starter Homes. Both of these schemes were aimed at allowing more people to make their first step on the property ladder.
However, with Theresa May’s premiership now in full flow, the playing field is looking a little different. Housing Minister Gavin Barwell MP has stated several time that the Government needs to start prioritising building houses rather than being preoccupied about who will buy them. Most recently stating:
“We mustn’t get to a point where the ownership objective is trumping the overall supply one. I’ve said repeatedly, I want to see more homes of every kind…we mustn’t have a housing policy that is obsessed with one tenure against other kinds.”
This seems fair, especially when one takes into consideration the fact that house building is currently running at around half the level needed to meet the ever increasing demand. The huge demand is one of the key factors in the increasing price of property and also rents.
Simple. Or at least that is how it appears. The 2016 Conservative Party Conference saw the unveiling of a new £5 billion funding packing to build new houses (interestingly the exact same amount that Labour pledged in the manifesto). Of this £5 Billion:
- £2 Billion of borrowed money will be used to improve public land that already has planning permission so that building can take place.
- £1 Billion will be used as short-term financing for small builders to build 25,500 homes by 2020
- £2 Billion will be used over a ‘longer period of time’ to deliver 200,000
Firstly, the Royal Institution of Chartered Surveyors (RICS) recently predicted a shortfall of 1.8 million rental homes in the U.K. by 2025. This new financing packing would still leave the U.K. over 1.5 million homes short if that prediction is to come true.
Secondly, Gavin Barwell has said that the Government must concentrate on getting the supply before concentrating on ownership. But, are the two not intertwined? You can build as many houses as you want but they are redundant if nobody wants them or can afford them. One is put in mind of the empty towns in Spain following the 2008 financial crisis.
It appears that the future for most is renting. However, the new houses will still have to be affordable. Landlords are seeing a spike in the amount of tax they are having to pay out on their properties, meaning many may not choose to add to their portfolio. Furthermore, as rents continue to rise, many renters are expecting a better quality of service.
This policy is clearly not fully formed and Arthur will monitor it for any updates.