On 5 September, a new Prime Minister will take office and inherit an unenviable to-do list featuring a cost-of-living crisis, a possible recession and energy and food insecurity caused by war in Europe.
They’d be forgiven for thinking that a housing crisis, decades in the making, might not be their top priority. Yet for the younger generation of renters locked out of homeownership and the 1.5 million living in overcrowded homes, we cannot kick this can down the road any further.
The urgency of this can’t be underplayed and it bears repeating. Four out of five renters who want to own their own home don’t have sufficient savings for a deposit in their area and three quarters don’t feel they could afford the cost. New data shows the average home now costs 8.7 times the average local wage – the highest ratio since records began.
That’s why last month I challenged the candidates for Prime Minister to meet their commitments by building the 300,000 homes a year our country so desperately needs and that their 2019 manifesto promised.
The candidates have both since railed against the target. It’s understandable why. Not only is housebuilding politically challenging but building that many homes annually has not been achieved in the UK since 1977. Why own a target that you feel destined to miss?
Of course, the reasons we continually fail as a country to build enough homes are broad, complex, and hotly disputed. They will only be addressed through strong political leadership, a willingness to challenge popular misgivings and follow the facts.
It will require a long-term strategy that will give confidence to the industry and certainly won’t be solved by the uncertainty of stop-start reform and the revolving door of government ministers tasked with the brief.
When the next Prime Minister appoints their cabinet, we can expect to have the 18th housing minister in 18 years. The country simply cannot take a long-term view of housing delivery if the leadership of that ministry is shown the door just as they have learnt the brief. Whoever wins the election must signal their commitment to solving the housing crisis by putting their brightest and best on the detail, a minister with the political clout to carry the backbenches and deliver results.
With the economy on the cusp of recession, we should be clear that building homes is good for growth. By delivering on the manifesto pledge, the next Prime Minister would be generating £14.2bn of economic activity and creating 260,000 additional jobs. During times of tough government spending decisions, the opportunity to unlock private investment and well-paid jobs across the country, by having the right policy framework in place, is surely unmissable.
That’s not to mention the real long-term benefits of providing decent and affordable housing that can and should be the cornerstone of any levelling up agenda.
The link between housing and outcomes in health and wellbeing are long established and backed up by medical evidence that shows that quality and tenure have a significant impact. Homeowners are less likely to live in overcrowded or damp conditions, they move home less often and are more likely to feel they belong in their community. This is good for children growing up as it leads to better outcomes in health, education, and social mobility.
Sadly, for this generation of young families they are now less likely to own, and research indicates that the recent lockdowns have had a more significant impact on their families’ wellbeing.
At Leeds Building Society we are constantly seeking ways to put homeownership within reach of more people. It was our founding purpose over 147 years ago and we are as committed as ever to that mission.
That’s why, last month, we announced we would no longer lend on second homes. Second homes reduce the number of homes available for local families, they have a negative impact on communities and don’t benefit local economies. As a truly purpose-driven lender we will put those energies into helping more first-time buyers onto the housing ladder instead.
Whoever our Prime Minister may be on 5 September 5, Leeds Building Society stands ready to support any effort to take a long-term view of housing delivery and to address this crisis with the urgency, perspective and gravity it merits.
Richard Fearon is chief executive of Leeds Building Society
