A home truth for the Tories: fix the housing crisis or lose power for ever

[Lurkerbelow]

Last weeks leading article for the spectator, home of the slightly more intellectual Tory.  Its nothing that we here don't already know but its still more grist for the mill, and it does seem like they might finally be starting to get the magnitude of what they face -

Quote

https://www.spectator.co.uk/2018/04/a-home-truth-for-the-tories-fix-the-housing-crisis-or-lose-power-for-ever/

A home truth for the Tories: fix the housing crisis or lose power for ever

Much rot is spoken about how the young have it so bad. In fact, this generation is healthier, richer and better-educated than any before — as well as being better-behaved and more conscientious than their parents were. But the one area where they do struggle is in buying a house. The asset boom of recent years has disfigured the economy, sending property prices soaring and conferring vast wealth on pensioners while giving the young a mountain to climb. Home ownership rates stand at a 30-year low. And the proportion of 25- to 34-year-olds in private rented accommodation has almost doubled in the last ten years.

This marks not just a dramatic socioeconomic shift in a country that was once strongly associated with owning your own home. (Britain now has the fifth-lowest ownership rate in Europe.) It also represents the rapid growth of a significant new political constituency: people who were brought up in owner-occupied homes but who must now bring up their own children in rented ones.

For the Conservatives, whose success over the past century has owed a lot to their claim to be the party of home-ownership and aspiration, this poses an existential threat. Why would anyone want to support the party of property if they cannot see a way to acquire a property of their own?

Rising house prices were once an electoral asset. They made people feel richer and more likely to reward the government presiding over the market that brought them their capital gain. But now the situation has flipped and high house prices are a huge negative for young voters. If you are stuck in a rented flat, frustrated at your in-ability to afford your own home, the housing policies advanced by Jeremy Corbyn at last year’s general election are far more appealing: a cap on rent rises, three-year minimum tenancies and a licensing scheme that aims to drive rogue landlords out of business.

 

It is little use the Conservatives protesting that these policies will not work, that rent controls will lessen the availability of rented property and make it even harder to find a home. Those stuck renting are likely to conclude that the current system is at fault and any change which disfavours landlords will be an improvement. Capitalism will never appeal to those without any capital.

Nor is there any point in Conservatives arguing, as they sometimes do, that property ownership doesn’t matter very much. It’s true that some advanced countries manage quite happily with even lower rates of home-ownership than ours. In Germany, only 52.5 per cent live in owner-occupied housing, against 64.4 per cent here. But there, most people renting have the security of long-term tenure. In Britain, most tenancies last from six months to a year.

We now have 1.8 million families with children living in homes where they can never properly settle. They may have to move every few months: cots, baby bouncers and all. If they cannot find another local rental property they may have to take their children out of schools where they are doing well. This marks a huge change since the last time that property ownership rates were this low. Then, renters in both the private and social sectors largely had the right to stay in their homes for as long as they liked.

The solutions to this problem attempted by the current government and the Tory-led coalition which preceded it have been inadequate and counterproductive. George Osborne’s Help to Buy scheme enabled a few people to get on the housing ladder by forcing the taxpayer to underwrite their mortgages, but only at the cost of stimulating more house-price inflation, making things even tougher for the next generation. A policy of subsidising demand without increasing supply is doomed from the outset.

If the Conservatives are to maintain the reputation as the party of home-ownership which has served them so well then they are going to have to consider the kind of radical measures used in other countries where the housing market was targeted by international investors. Switzerland allows only bona fide residents to buy residential property in most cases. Jersey and Guernsey have parallel ‘open’ and ‘local’ markets which ensure most housing is bought by the people who live there. It would take only a very small reform to ensure that a proportion of new housing in Britain becomes subject to covenants ensuring it can only ever be bought by owner-occupiers.

As for rented housing, the government could do worse than simply to adopt some (not all) of Labour’s policies. It would cost no public money to change the law so that in most cases tenants could look forward to a minimum of three years’ security of tenure, with rents controlled for that duration.

There are Conservatives who will scoff at some of these proposals, seeing them as undue interference in the market. But our restrictive planning system ensures that housing in Britain is not a free market anyway. And those who stick to this line may soon wake up to find that the Conservative party has lost the younger generation for good and will never hold power again.

The Tories have two options: fix the housing market or lose the next election. It’s time to choose.

 

Edited April 30, 2018 by Lurkerbelow

[PopGun]

Could all have been avoided way back in 2010 by removing the state props and taxing BTL, with austerity/new labour primed excuses. 

Oh but they’re too vested themselves, so props on top of props it was. Oh dear.

 

[MattW]

11 minutes ago, PopGun said:

Could all have been avoided way back in 2010 by removing the state props and taxing BTL, with austerity/new labour primed excuses. 

Oh but they’re too vested themselves, so props on top of props it was. Oh dear.

 

+ 1.

It also doesn't help when they replace the Housing Minister every few months (it feels like it's that frequent).

[Si1]

1 hour ago, PopGun said:

Could all have been avoided way back in 2010 by removing the state props and taxing BTL, with austerity/new labour primed excuses. 

Oh but they’re too vested themselves, so props on top of props it was. Oh dear.

 

+2

[DarkHorseWaits-NoMore]

Quote

A home truth for the Tories: fix the housing crisis or lose power for ever 

Never under estimate the ability of the media to smooth over and re-educate the sheeple down the road. It will all be soon forgotten. Look at the state of the current gov't, in years gone by many more of the front bench would have been thrown under a bus and sacked. The media has been giving this shocking shower of incompetent, useless and corrupt bunch ministers a very soft ride.

 

[Houdini]

2 minutes ago, TonyJ said:

I think the big shift with this article is its focus on artificial house price inflation as the problem, rather than just a failure to build, which is usually lazily blamed as the only reason for the problem. How very refreshing that it might be beginning to dawn on the Tories that HPI is a serious electoral liability rather than an electoral asset! They now need to take that extra step, and allow HPI to go into reverse in order to win elections.

The first thing they really need to do is to move  house purchasing to an equal footing with no tax relief on residential property. A couple more articles like the one above and it will be the perfect time to send a few letters suggesting it to the treasury.....

[stuckmojo]

1 hour ago, DarkHorseWaits-NoMore said:

Never under estimate the ability of the media to smooth over and re-educate the sheeple down the road. It will all be soon forgotten. Look at the state of the current gov't, in years gone by many more of the front bench would have been thrown under a bus and sacked. The media has been giving this shocking shower of incompetent, useless and corrupt bunch ministers a very soft ride.

 

Just wait until you get McDonnell and Abbott.  

[zugzwang]

19 minutes ago, stuckmojo said:

Just wait until you get McDonnell and Abbott.  

Both already subject to an extensive campaign of personal abuse and vilification the likes of which no Conservative politician ever has to endure. You'd imagine that someone on the Tory side would have the decency to stand up and denounce these scurrilous attacks in the name of democracy but as far as I'm aware none of them ever has.

[Guest]

It's quite simple really, I just want them to make me feel hard work can get me somewhere. I will even go halfway with them, I am in the top 10% of earners, if they just make it possible for me to afford an average home that would be a start. Instead though they are making us work our socks off and somehow rigging it so we can borrow more and for longer and then talk as if they are doing us a favour.

 

[Guest]

1 hour ago, TonyJ said:

I think the big shift with this article is its focus on artificial house price inflation as the problem, rather than just a failure to build, which is usually lazily blamed as the only reason for the problem. How very refreshing that it might be beginning to dawn on the Tories that HPI is a serious electoral liability rather than an electoral asset! They now need to take that extra step, and allow HPI to go into reverse in order to win elections.

We are now ready for the new third political party, and I don't mean the liberals or UKIP

[stuckmojo]

9 minutes ago, zugzwang said:

Both already subject to an extensive campaign of personal abuse and vilification the likes of which no Conservative politician ever has to endure. You'd imagine that someone on the Tory side would have the decency to stand up and denounce these scurrilous attacks in the name of democracy but as far as I'm aware none of them ever has.

I assume you are being sarcastic. The fact alone that two plonks of that calibre can rise to the front bench of the opposition (with their mate Vaz in tow) speaks volumes about the shit state of the Tories on the other side. One does not understand what "borrowing" means - and thank ****** he's only the shadow chancellor - the other has worrying signs of stroke/dementia/lack of awareness. Jesus wept I am terrified by them (not necessarily by Labour but by these 4 horsemen, ****** me). 

[stuckmojo]

3 minutes ago, TonyJ said:

As long as it is against favouritism towards one group or another. They need to stand for a level playing field, unlike the Tories and Labour, who believe in winner takes all and loser must pay.

Agreed. But the bipartisan system of mates who pretend to be enemies will never let them happen. None of the lot in Westminster ever have to suffer the consequences of their policies. 

[eric pebble]

21 minutes ago, inbruges said:

It's quite simple really, I just want them to make me feel hard work can get me somewhere. I will even go halfway with them, I am in the top 10% of earners, if they just make it possible for me to afford an average home that would be a start. Instead though they are making us work our socks off and somehow rigging it so we can borrow more and for longer and then talk as if they are doing us a favour.

 

20 years ago -- yes - 20 years ago - I started to get really angry about hpi.  I was living in London - and I really noticed it getting worse and worse and worse.  It started about 1997 actually -- yes -- when that @hole Bliar and his sidekick Gordo Idiot - Broon were in charge.  They DELIBERATELY let it run -- and run -  -- AND RUN.    They did ABSOLUTELY SWEET F A about it.  

SO --- it started under Labour -- or "Niue Labbia" as they called themselves.  And --- it got worse and worse and worse.  Idiot-Broon was UTTERLY UTTERLY USELESS as Chancellor --- he did NOTHING  -- NNOTHING - to stop it.  And it got even worse when he was PM --- the worst PM in the entire history of Britain.

And yes -- they Tories have been UTTERLY CRAP too --- And "Help to Buy"  is just the most idiotic policy I have ever seen - and it just shows how utterly, utterly, UTTERLY clueless our "leaders" are.  They are THICK as p ig sh $ t.

I watched it all unfurl over 20 years.  And I have been in a state of complete dis-belief of the whole thing for all that time.

It is a catastrophe.

[Guest]

10 minutes ago, eric pebble said:

20 years ago -- yes - 20 years ago - I started to get really angry about hpi.  I was living in London - and I really noticed it getting worse and worse and worse.  It started about 1997 actually -- yes -- when that @hole Bliar and his sidekick Gordo Idiot - Broon were in charge.  They DELIBERATELY let it run -- and run -  -- AND RUN.    They did ABSOLUTELY SWEET F A about it.  

SO --- it started under Labour -- or "Niue Labbia" as they called themselves.  And --- it got worse and worse and worse.  Idiot-Broon was UTTERLY UTTERLY USELESS as Chancellor --- he did NOTHING  -- NNOTHING - to stop it.  And it got even worse when he was PM --- the worst PM in the entire history of Britain.

And yes -- they Tories have been UTTERLY CRAP too --- And "Help to Buy"  is just the most idiotic policy I have ever seen - and it just shows how utterly, utterly, UTTERLY clueless our "leaders" are.  They are THICK as p ig sh $ t.

I watched it all unfurl over 20 years.  And I have been in a state of complete dis-belief of the whole thing for all that time.

It is a catastrophe.

I tell you another group of people that suffer, the ones that fall off the ride for just 5 minutes to never be allowed to get back on again. What I mean by that is so many have some adversity at some point in our lives that hits us for six and puts us out of action for sometimes just a short while. We dust ourselves down and grit our teeth and get our act together to find out there is no way of ever catching up for most of us, mine was a dying family member now passed away.

The Tories just cannot see it any more, they don't understand the old basics, you make someone feel like they are worthwhile and they will pay you back in hard work and loyalty, instead they just chip away at you aspirations and hope. They also send out a message of not to look after sick family or friends, stay with the woman you hate, ignore and never nurture the kids, because if you fall off the ride we will never let you on again

[Dorkins]

1 hour ago, stuckmojo said:

Just wait until you get McDonnell and Abbott.  

Am I supposed to be scared or something? The Tories, their Lib Dem enablers and the New Labour governments that preceded them have done a great job of pricing me and my siblings out of owning an average home and keeping us priced out for literally decades now despite us all being on decent wages. What are McDonnell and Abbott going to do that's worse, come round my house and sh1t in my bed while I'm at work making money for the landlord?

[stuckmojo]

4 minutes ago, Dorkins said:

Am I supposed to be scared or something? The Tories, their Lib Dem enablers and the New Labour governments that preceded them have done a great job of pricing me and my siblings out of owning an average home and keeping us priced out for literally decades now despite us all being on decent wages. What are McDonnell and Abbott going to do that's worse, come round my house and sh1t in my bed while I'm at work making money for the landlord?

That's not exactly a singing endorsement either. Put it this way, if you work for a living, you'll never be better off under a Labour government. No matter how despicable the Tories are (and they are a massive shower of shit at the minute)

[Guest]

3 minutes ago, Dorkins said:

Am I supposed to be scared or something? The Tories, their Lib Dem enablers and the New Labour governments that preceded them have done a great job of pricing me and my siblings out of owning an average home and keeping us priced out for literally decades now despite us all being on decent wages. What are McDonnell and Abbott going to do that's worse, come round my house and sh1t in my bed while I'm at work making money for the landlord?

I am totally with you and sounds like we are voting the same way. Like I already said today I am voting to have my legs blown off instead of losing my wedding tackle, great choice isn't it.

[Old Guy]

1 hour ago, eric pebble said:

20 years ago -- yes - 20 years ago - I started to get really angry about hpi.  I was living in London - and I really noticed it getting worse and worse and worse.  It started about 1997 actually -- yes -- when that @hole Bliar and his sidekick Gordo Idiot - Broon were in charge.  They DELIBERATELY let it run -- and run -  -- AND RUN.    They did ABSOLUTELY SWEET F A about it.  

SO --- it started under Labour -- or "Niue Labbia" as they called themselves.  And --- it got worse and worse and worse.  Idiot-Broon was UTTERLY UTTERLY USELESS as Chancellor --- he did NOTHING  -- NNOTHING - to stop it.  And it got even worse when he was PM --- the worst PM in the entire history of Britain.

And yes -- they Tories have been UTTERLY CRAP too --- And "Help to Buy"  is just the most idiotic policy I have ever seen - and it just shows how utterly, utterly, UTTERLY clueless our "leaders" are.  They are THICK as p ig sh $ t.

I watched it all unfurl over 20 years.  And I have been in a state of complete dis-belief of the whole thing for all that time.

It is a catastrophe.

+1

[dougless]

1 hour ago, inbruges said:

I tell you another group of people that suffer, the ones that fall off the ride for just 5 minutes to never be allowed to get back on again. What I mean by that is so many have some adversity at some point in our lives that hits us for six and puts us out of action for sometimes just a short while. We dust ourselves down and grit our teeth and get our act together to find out there is no way of ever catching up for most of us, mine was a dying family member now passed away.

The Tories just cannot see it any more, they don't understand the old basics, you make someone feel like they are worthwhile and they will pay you back in hard work and loyalty, instead they just chip away at you aspirations and hope. They also send out a message of not to look after sick family or friends, stay with the woman you hate, ignore and never nurture the kids, because if you fall off the ride we will never let you on again

I agree with inbruges' comment about falling off the ride - you really don't want to do that these days.  I would also partly agree with Eric's comment about the Unfair Blair Bunch but the damage really got going after the Financial Deregulation brought in under Thatcher - don't forget the boom we had in the eighties and the fallout from that.

[tomandlu]

14 hours ago, PopGun said:

Could all have been avoided way back in 2010 by removing the state props and taxing BTL, with austerity/new labour primed excuses. 

Oh but they’re too vested themselves, so props on top of props it was. Oh dear.

 

The thing that gets me is that you sincerely didn't have to a genius to figure out where we were heading long before that. Circa 2006, it should have been bleedin' obvious - no theorising needed; you just had to follow the trajectory. Due to family connections, I do mix occasionally with a few left-wing columnists and academics, and I was regarded as mildly eccentric for my doomsaying. Now, they're all making a fortune, so to speak, blathering on about it in articles and think-tank reports.

All I can say is that the consensus has an inertia, and is hard to change or turn, and too many people in economics and politics (and the internet for that matter) seem to mistake agreement for verification.

[lostinessex]

30 minutes ago, tomandlu said:

The thing that gets me is that you sincerely didn't have to a genius to figure out where we were heading long before that. Circa 2006, it should have been bleedin' obvious

I remember pointing out to work colleagues around 2001 / 2002 that the 20% HPI in London was unsustainable without causing massive issues further down the line. At that stage HPI in london had been crazy for a couple of years - and at work people were piling into property as a pension after dot.com crash has screwed out work pensions. When I said to one guy who'd recently bought that if house prices carried on rising like this then someone in his job would no longer be able to afford to buy a property in a few years his response was 'well I'll have had a promotion by then' - he simply couldn't see my point was about the future generations - the people coming along behind - he could only see it from his own perspective.

He'll have done OK - another 16 years of HPI since that conversation - but he had kids around then and they would now be getting to the age of leaving home. I often wonder if he sits there looking at the prices his kids will have to pay and it maybe starts to dawn on him that the massive gains he's made have come at a cost.

[skomer]

It is going to be interesting how the Local Election results pan out in London this week.

Especially in Wandsworth, Westminster and the outer-London boroughs. (most of inner-London is already a Labour fiefdom).

Home ownership has collapsed in the outer-boroughs over the past 20 years. The Tories didn't seem  to care  about siding with the landlords and New-Labour were more than happy for property to be hovered up for BTL. (think Blair and his 25 property portfolio)

Will the electorate in those boroughs prefer that low-council tax over HPC and insecure rentals?

Its going to be close, boomers versus the rest?

 

[tomandlu]

16 minutes ago, skomer said:

It is going to be interesting how the Local Election results pan out in London this week.

Especially in Wandsworth, Westminster and the outer-London boroughs. (most of inner-London is already a Labour fiefdom).

Home ownership has collapsed in the outer-boroughs over the past 20 years. The Tories didn't seem  to care  about siding with the landlords and New-Labour were more than happy for property to be hovered up for BTL. (think Blair and his 25 property portfolio)

Will the electorate in those boroughs prefer that low-council tax over HPC and insecure rentals?

Its going to be close, boomers versus the rest?

 

I'm a long-term Labour* voter in Wandsworth, and I'm on tenterhooks. I just worry that we've made it to the finals, but are about to go out to Germany on penalties or something. Certainly going to be interesting.

* with a post-Iraq hiatus

[Doner Kebab]

Good article. Thanks for posting lurkerbelow

[ccc]

"as being better-behaved and more conscientious than their parents were"

 

Interesting article but whoever wrote it clearly doesn't visit planet UK very often.