David Skelton founded Renewal, with the aim of broadening the appeal of the Conservative Party to working class voters and voters outside of the South East.
The housing divide is one of the starkest in a country that the Brexit referendum showed is starkly divided, which is one reason why tackling the housing crisis should be a major domestic priority. Put simply, it continues to entrench the inequality that the Prime Minister has rightly railed against. For many people on the National Living Wage, the concept of being on the housing ladder is a distant pipedream. They’re all too often stuck in poor quality, over-priced, private rented accommodation, with rent taking up a huge amount of their income.
While home ownership has fallen by over seven per cent since its peak in 2003, the level of private renting has more than doubled. Around half of private renters are unable to save anything towards a deposit, despite saying that they want to get on the housing ladder. These ‘silent have-nots’, as John Major once called them, often struggle to make ends meet after rent has been paid, meaning that the very idea of saving up for a deposit to buy a house is ridiculous.
Such a division between those who already own homes and those who do not deeply entrenches existing inequality. And the cycle of rising house prices and rising rents is an increasingly difficult one to break out of. The proportion of first time buyers on the lowest incomes halved between 2003 and 2015, with house prices massively outstripping wages. Recent measures to expand home ownership, although welcome, have failed to reach many working people, especially as the supply of genuinely affordable housing has failed to come close to matching demand. Being stuck in this trap entrenches inequality, but also costs the state a huge amount of money in Housing Benefit – effectively a state subsidy to private landlords.
But there is a way out of this seemingly self-perpetuating cycle of decline. There is a way of ensuring that the property owning democracy becomes more than mere rhetoric. In a report published today called Homes For All, Renewal sets out a way of extending the promise of home ownership to those low-paid people who feel shut out from the housing market at the moment.
Government has a role to play in pushing forward a scheme that will lead to a new generation of low-rent homes, with a fast track to home ownership. These would be genuinely affordable, with rent no higher than a third of the salary of the take-home pay for a worker on a low income, and would come with a real fast-track to home ownership. These new, low rent homes could be funded directly by the Government, in partnership with the private sector, or via local authorities by altering their borrowing limits. Provision of them should also be prioritised by the metro mayors being elected next year. By providing low rent, high quality housing, the scheme could help families to save for a deposit, with their ability to exercise Right to Buy after two years. The proceeds from any sale would then be recycled into building more low-rent houses.
Polling by Shelter showed that such a scheme that tackled the housing crisis and gave the low-paid a helping hand on to the housing ladder would also be hugely popular. This emphasises a key point – doing the right thing would also make political sense. Theresa May has a chance to reshape the country economically and politically, transforming the Tories from being seen as the party of the rich to one that is seen as transforming life chances for everybody in society.
A Government-backed low-rent housebuilding programme and a focus on regenerating deprived communities would leave a legacy that would genuinely make many people’s lives better. It would be a great social reform that would tackle the most urgent domestic issues facing us today, improving the living standards of people currently stuck in poor quality accommodation and ensure that home ownership becomes the preserve of the many, not the few.