It is a truth universally acknowledged that the UK has a housing shortage urgently in need of attention. Most people also agree the crisis can only be solved by a government with a feasible long-term plan for delivering sustainable, affordable homes, in partnership with the private sector. Calls for action have been growing progressively louder over the years and now echo across the political spectrum.
National House Building Council (NHBC) figures published on 13 May show that only 26,240 new homes were completed in the first quarter of 2024, down 13% on a year ago and a country mile away from the 300,000 a year promised by the mid-2020s in the last government manifesto. These paltry figures have been blamed on higher mortgage rates and ‘the weather’. But there are far deeper structural issues at play, including the planning regime, environmental regulation, central and local funding, political will…the list goes on.
The build-up (no pun intended) of our property deficit has been many years in the making. It is 27 years since Tony Blair came to power promising ‘joined up government’, placing housing at the centre of his policy programme, and 20 years since his government commissioned Kate Barker’s housing review, which was the first to identify the need for 300,000 new homes per year to meet the needs of the populace. The Conservative/Lib Dem coalition described the state of UK housing as ‘dysfunctional’ in 2010, then presided over a 35% cut in government funding for housebuilding (including a 44% reduction in social housing investment). Since 2015, the Tory incumbent has introduced a controversially punitive tax regime for buy-to-let landlords and introduced some schemes to help first-time buyers, but done little to address the underlying issues creating the chronic undersupply of property.
In fact, Kate Barker has this year joined another (private) commission to address the housing shortage. Little wonder she describes it as “depressing” that many of the problems she identified in her 2004 review remain, and says that a “pragmatic overthink is overdue”.
The pragmatic ‘overthink’ needs to be bold and far-sighted. The truth is that no government is ever around long enough to put truly long-term plans into effect. They are, perhaps inevitably, driven by the short-term pressures of press and public opinion on what is happening right now, and it’s tough for them to take politically unpopular decisions. But if we are to fix the housing crisis in a sustainable way, and deliver sufficient decent homes to the owner-occupiers, private and social tenants of today and tomorrow, we need to look not just beyond the five years of the next Parliament post-election, but to the next 50 years.
That is a real challenge. The next government will have a lot on its plate to sort out, including reducing carbon emissions; making our homes more energy-efficient; securing the energy supply; health and social care provision; public transport; cleaning up the water supply; large infrastructure projects such as schools and hospitals, and the small matter of ensuring the security of the UK in an increasingly turbulent world.
All of these issues are pressing and the degree to which they are prioritised will depend on a wide range of influencing factors. But it surely makes sense – practically and politically – to acknowledge how important housing is, both as one of the most basic needs we have as humans and one of the most aspirational desires. Ensuring that everyone has access to decent accommodation with sufficient security of tenure, whether owned or rented, should be a minimum target. Encouraging more people to become owner-occupiers also makes sense, not just because of the peace of mind and financial benefits it brings, but because it fuels aspiration during our working lives and provides security in retirement, while relieving the government of the cost of supporting a growing pensioner population in private rented accommodation.
Of course, the unintended consequence of promoting owner-occupation is often a boost to house price inflation – unless it is accompanied by a significant increase in the number of properties being built.
A new administration must address the supply/demand imbalance plaguing our housing market as a top priority. It should use the reams of housing market research already carried out by numerous cross-party commissions as sensible blueprints for action, rather than wasting time on a new raft of White Papers analysing the same issues. Appointing a dedicated housing minister and keeping them in the role for more than five minutes would be universally acknowledged as a good place to start.
Kate Davies is executive director at the Intermediary Mortgage Lenders Association
