Daniel Bentley is the Editorial Director of Civitas.

Theresa May has highlighted the housing problem as a key challenge for her government, and the recent Cconference this week provided some of the first substantial insights into what might be in store. These are a few thoughts on the principal themes that are emerging.

1. Help to Buy is going nowhere.

There was some pre-conference confusion about the future of Help to Buy after Philip Hammond announced the guarantee scheme was to be scrapped at the end of 2016. But this was not the symbolic break with George Osborne’s policy that some took it for. The guarantees are being scrapped simply because they are no longer needed: a rejuvenated mortgage industry is now providing the equivalent lending without them.

Help to Buy equity loans, on the hand, are going nowhere, despite continued concerns that they by increasing purchasing power they are inflating the market still further. In fact, they had their biggest ever take-up in the last quarter: 10,721 of these loans were used to purchase a new-build home, more than a third of the 27,910 private-sector completions during the period. May reiterated in her conference speech that Help to Buy (and Right to Buy, this totemic Tory policy mentioned in the same breath) were ‘the right things to do’. Tellingly, perhaps, there was no such mention for Starter Homes, the initiative to sell new homes at a 20 per cent discount to first-time buyers.

There is a strong determination to increase housebuilding – but by how much?

All governments want to increase housebuilding numbers, but there is a new sense of urgency now. Sajid Javid described it as a “moral duty” in his speech. He has indicated that he is much less tenure-conscious too, simply wanting to increase overall supply rather than focusing on owner-occupation like the Cameron regime (another reason to wonder about the future of Starter Homes).

The Prime Minister drove the point home in her own speech, saying: “We simply need to build more homes”. What has been less well noted than the rhetoric, though, is that the May government has so far set its sights no higher – in public at least – than its predecessor. Its ‘ambition’ remains that of Cameron’s, to build one million homes in this parliament.

This is just 200,000 a year – admittedly better than the 170,000 net supply achieved last year, but nowhere near what is actually needed. The Government’s household formation projections for 2014-2019 point to the need for 236,000 homes a year, and that doesn’t even involve tackling the backlog. The House of Lords Economic Affairs Committee (whose members include the former chancellors Norman Lamont and Alistair Darling and the former Cabinet Secretary Andrew Turnbull) “strongly recommended” this summer that England needed 300,000 new homes a year.

Developers are very much in the line of fire

Javid took a remarkably strident tone with the housebuilding industry in his speech: “The big developers must release their stranglehold on supply. It’s time to stop sitting on landbanks, delaying build-out: the homebuyers must come first”.

This echoes what we at Civitas have been flagging up: planning permissions for new homes are coming through in much bigger numbers now (277,000 in the year to June 2016) but building activity is not keeping up. Developers are extremely defensive about this, so it was significant that the Communities Secretary addressed the issue so explicitly; the Prime inister too spoke of the housing market being ‘dysfunctional’.

The question now is how the Government intends to tackle this. Osborne had been looking at the possibility of introducing “use-it-or-lose-it: planning permissions, an idea which has been endorsed, notably, by the Chairman of the Homes and Communities Agency, Sir Edward Lister, but dismissed by housing minister Gavin Barwell as “too aggressive”. A housing white paper is expected in the next couple of months and is likely to provide further detail on how the Government plans to increase build-out rates.

Intransigent local authorities can also expect it in the neck

While planning permissions are coming through more quickly now, the local picture is patchy and ministers remain frustrated with the hundred or so councils who have still do not have Local Plans in place. Javid used an eve-of-conference interview with the Financial Times to warn that he would “be very tough” with councils that fail to identify enough land for housing.

A deadline of early 2017, by when councils have been told they must have completed this process or face intervention from the Secretary of State, is fast approaching. It remains slightly unclear precisely how the Government intends to intervene, however. Some councils will say they simply do not have the land – May’s determination to preserve the “sacrosanct” green belt is to some extent a restricting factor here. But there is little doubt many are too susceptibile to the lobbying of local Nimby interests. Javid clearly had this in mind when he told councils they were there to make “the right decisions, not the easy ones”.

There is little sign of a major increase in public investment in housing – for now

There is growing anticipation that a less fiscally hawkish government might be prepared to borrow and spend on infrastructure, but it is far from certain that this means money for housebuilding.  May did talk about “more government investment” for housing – but in the context of the recent announcement of a £3 billion ‘home builders fund’ to support SMEs and infrastructure requirements, and a £2 billion “accelerated construction” initiative to speed up build-out rates on surplus public sector land.

Both initiatives are good ones but their effect will be a drop in the ocean, together expected to boost building by a mere 40,000 homes between now and 2020. There is the Autumn Statement to come, when the Chancellor is likely to serve up one or two surprises, but there is little so far to indicate a step-change of approach on this front.

All in all, ministers are clearly determined to make some headway on housing, and Javid has identified the roadblocks to success as slow build-out rates and the feet-dragging of a hard core of local authorities. But ministers are yet to present clear answers to these issues and are not, yet, committing themselves to delivery on the scale that is needed. Given the size of the challenge, that might be politically wise – but if they want to finally get on top of the housing shortage, they really do have to think big.

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