Esther McVey used to be the Work and Pensions Secretary until she resigned last year. She is now back in Government as the Minister of State for Housing and Planning. Supposedly, that is a demotion. But surely her new job is trickier and more important. For all the controversy about the welfare reforms, they are in place and proving effective. When it comes to wider home ownership, that central Tory mission, there have been some tentative signs of progress. Yet the fundamental problem with the housing market remains. It isn’t really a market. Supply is artficially constrained by the state. So increased demand just pushes up prices. The planning system has also managed to ensure that usually what new building is allowed looks awful. This understandably strengthens the anti-development lobby, the NIMBYS, making the shortage even worse. Solid economic growth would help with many of the Government’s objectives – being able to afford increased spending on public services while also cutting tax. However, the experience of recent decades has been that periods of growth might have resulted in an abundance of many things this has not included homes. While everything else has become more affordable, housing has become less affordable.
In her first speech as Housing Minister, last week in Newport, McVey was clear that “we have to tackle this Great British housing building problem.” She said:
“Too many people feel that vital link between hard-work and owning their own home is broken. And when that link is severed, social mobility and opportunity falls away.
For so many people in our public sector, like our nurses and our teachers, like our police, owning their own home feels like the dream that has been taken away from them.
This is not right, they are the backbone of our country. They deserve a home of their own and they are looking to us to see what we can do. They are looking to us to fix it like we look to them to teach our kids like we look to them when we need healthcare, to look after us. They’re looking to us now to return that favour and look after them.
So, that’s 300,000 more homes a year to build. Each and every year.
Now we’re getting closer to that target – we’re building more, more than before. In fact last year we built more homes than in every year bar one in the last 31 years.
In Greater Manchester, the number of extra homes built is rising by more than 12 per cent.
In Birmingham, it’s rising by 80 per cent.
Only in London, have the number of new homes fallen.
While the trend is heading upwards, I’ve found there’s still serious barriers stopping that progress unnecessarily, and we need to understand what those barriers are, understand what is getting in our way so we can remove them.
We also need to focus on Brownfield sites – what are we doing there? Are we doing enough there? Are we building enough homes there? Regeneration must be something we should be most proud of, turning round, I call it, unloved land.”
If we accept that the issue is supply rather than demand, then it follows that the “Help to Buy” scheme won’t work. It will certainly have helped some people – but overall have pumped up prices even more and so been unhelpful to others. Theer was a hint in McVey’s speech acknowledging this:
“There is a limit to what Government can do, for example, Help to Buy is precisely that. It is helping people to buy, it is not helping somebody to make a profit, it is not helping to increase the prices of property. It is about helping people to buy.
“So this Government will be vigilant about what is working, keeping an eye on our goal. That is a shared goal, helping people into a home and into home ownership.”
There were some specifics concerning the modest changes announced so far:
“We’ve looked at ownership models, so making Shared Ownership more accessible for working families. We’ve started that already so buyers can have a staircase of one per cent increases rather than ten per cent leaps.
We’re going to look to expand Shared Ownership, supporting it in different ways, taking out what we hear to be the difficulties of it, the expense of it. It shouldn’t be unfair for those trying to get onto the housing market.
And Rent to Buy, so people can rent knowing that they are going to buy, knowing that they’ve got a bit of breathing space, maybe it’s in five years, maybe it’s in ten years, but they will get to own that property – so they can plan, knowing they have the certainty of getting a deposit and getting that house.
And Right to Build, so many places around the world have far more people building their own homes, so we’re going to be there, whether its support for Right to Buy or Right to Build.”
This was a speech which championed home ownership:
“A dream that the vast majority of the public still have and continue to have.
And why is that? It’s about having a stake in society, it’s about having security, it is about aspiration, it is actually about freedom. It’s about financial security, and it’s about safety for you and your family and it provides people with a real stake in their community.”
She also balanced the statistics about recent achievements by saying:
“It is a scandal, possibly the greatest scandal over the last 30 years that we’ve had a shortage in houses. And that has led, as we know, to a rise in renting and costs, and to a fall in home ownership which has destroyed the aspiration of a generation of working people.”
So this was her starting point. A statement of intent. After the depressing messages from some of her predecessors, this is welcome. I look forward to the Party Conference and the election manifesto to see if it will be followed by the specific radical policies required. Mine would include a much bolder offer on shared ownership, an end to state land banking, zero VAT for the renovation of old buildings, and delivering on the right to buy for housing association tenants which has already been promised. And above all, to have a presumption in favour of allowing development (including in the Green Belt), provided it adhered to local design codes that had popular consent, which could give confidence that what went up would be beautiful.