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Houses have doors which keys open – and what’s true for houses is also true for housing, at least as far as home ownership is concerned.  Governments can adopt a localist housing policy, in which councils and communities are in charge, and this might result in more homes being built.  Or governments can go for a centralist one, as Labour did, with targets being imposed locally by diktat.  Again, this can work: there was a building boom of sorts from 2001 until 2007.  But home ownership and lending to first-time buyers actually fell, because he way the housing market worked meant that most of the growth was in buy-to-let.  There was no policy key to unlock the door to more home ownership.

The most eye-catching part of Coalition housing policy was probably Help to Buy, and that of this Government the pledge to build 200,000 starter homes.  But that key to unlock the door to more home ownership has been on the demand rather than the supply side.  Ministers have pursued a less centralist policy than Labour, but also a less localist one than was implied in opposition.  Essentially, the Planning Inspectorate, responding as much to the will of the Treasury as the wishes of CLG, has pushed and shoved local councils into building more homes.  Meanwhile, George Osborne is trying to squeeze the buy-to-ley market.

As Brandon Lewis wrote recently on this site, “the number of first time buyers has doubled. The number of new homes has doubled. Public support for new house building has doubled”.  The policy is working, up to a point.  In February, housing starts and completions hit a seven year highHome ownership is no longer falling.  But as Lewis himself has conceded, much more needs to be done.  240,000 more houses must be built each year to meet demand; in 2014, roughly 118,760 were constructed.  And while home ownership may no longer be falling it is, at best, rising slightly from a very low base: last year, it hit its lowest level for 25 years.

Not everyone agrees with the policy.  Some say that Britain has plenty of houses, and there’s no need to build any more.  Others, that if immigration is controlled then the problem is solved.  Others still, that it is wrong to promote home ownership so enthusiastically, and that government should aim to promote renting, continental-style, instead.  But for as long as lots of older single occupants cling to living in family homes, and immigration runs at roughly the present level, the demand for new housing won’t tail off.  Indeed, even were migration to end altogether, pressure for more homes would be substantial.

Furthermore, the urge to own property, with the security and independence it can bring, is woven deep into British culture.  “If my life is for rent and I don’t learn to buy,” sings Dido, “Well I deserve nothing more than I get/ Cos nothing I have is truly mine”.  The Government will be wary of new housing legislation in next week’s Queen’s Speech – given the pummelling meted out to the present Housing Bill by the Lords – and not everything that Ministers can do needs primary leglisation.  But there are two main measures that a Social Justice Queen’s Speech would promote – one perhaps requiring a change in the law; the other not necessarily doing so.

That second measure is more active building on state-owned land.  Departments, local authorities, and other public bodies own a mass over under-utilised public land.  Enough has already been released under the Coalition to build over 103,000 new homes, and departments have targets for further release, but there is always more to be done.  For example, the Government could beef up the Homes and Communities Agency, giving it new powers to drive the identification and sale of land more aggressively.  The first measure would entail further change to the planning laws – no easy process given the precariousness of the Government’s majority.

The present revival in housebuilding is vulnerable to an economic downturn, and Britain’s housebuilding industry lacks the capacity to build at scale in any event.  The key to riding out any recession is for the public sector to build more, and the key to boosting capacity is for government to provide certainty, or as close to certainty as it can get.  That means a guarantee that more land will become available.  If developers know that more land will become available for building, and that the price of land is likely to fall, they less likely to hedge their bets and bank land.  This is why George Osborne wants even more pressure to be put on local councils to approve housing growth.

In the ConservativeHome Manifesto, we argued that government should switch support from demand-side measures to supply-side ones – in other words, enabling councils, housing associations and other registered social landlords to build new homes for sale.  Local councils could experiment with different methods, including part rent/part buy schemes and the conversion of rent into an equity stake in a stock of properties.  This would be a modern variant of Harold Macmillan’s triumphant building of 300,000 houses a year: about half of them were council homes, and he wouldn’t have hit his target without them.

This might require toughening up compulsory purchase orders – at least if the Government is determined to build more of the garden towns and cities that our manifesto also urged; Lewis referred to some of the present expansions in his article (at Ebbsfleet, Bicester, Barking and Northstowe).  This raises the question of at what level such planning powers should be exercised at a time when government is embarked on its devolution experiment.  But whatever the answer turns out to be, local councils have a indispensable role in building more homes for sale – at least, if more young people are to enjoy the home ownership opportunities that their parents once took for granted.

33 comments for: The Social Justice Queen’s Speech 4) If we’re to boost home ownership, councils must build more housing

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