Duncan Bowie says look away if you don’t own your home
The big issue in the housing chapter of the manifesto is the proposal to extend the Right to Buy to Housing Association tenants –perhaps the most radical policy in the whole manifesto. The idea is of course not new and previous Tory politicians and think tanks have floated it before, only for it to be pointed out that most Housing Associations have charitable status, and forcing charities to dispose of assets below market value raises legal as well as ethical issues. Currently tenants of housing associations in self-contained properties can acquire their homes so long as they are self-contained, were built since 1997 with funding from the Housing Corporation/ HCA or local authority or transferred from a council prior to 1997. This applies to about 800,000 tenants. Discounts are however much lower than under Right to Buy for council tenants and range from £9,000 to £16,000 depending on location. The new proposals would mean that the current maximum discounts applying to council tenants of £102,700 in London and £77,000 in the rest of England, would also apply to all housing association tenants. They would apply to both those Housing association tenants who have the Right to Acquire, and the 500,000 who do not. This would be an attractive proposition for many Housing association tenants. And no doubt the Tories are seeking the votes of tenants who believe that one day they might just be well off enough to buy their homes, given a lottery win or two, as well as those who could actually afford to do so now. The Conservatives argue that this initiative would not reduce the overall stock of social rented homes as the government would provide funding for one-for-one replacement. This would apparently be funded by a Brownfield Regeneration Fund.
The Conservatives are also proposing that local authorities would be required to sell off their most expensive properties when they become vacant rather than re-let them. Though the value threshold is not stated, the manifesto says these would also be replaced with ‘normal’ affordable homes, funded by the Brownfield Regeneration Fund, though clearly not on a like for like basis. This would clearly reduce the supply of low rent homes in high value areas such as inner London, which will have a negative impact on the viability of low pay service sectors. It is stated in a Conservative press release that the Brownfield Regeneration Fund will be worth a billion pounds over 5 years. It is however unclear how this relates to the current housing investment programmes funded through the Homes and communities agency and the mayor of London which are currently budgeted to run from 2015 to 2018. There appears to be no commitment to extend these programmes until 2020 – the end of the five year fixed parliamentary term.
The housing section of the manifesto focuses on ensuring that Britain is a nation of homeowners. It states that ‘Everyone who works hard should be able to own a home of their own’. The manifesto reaffirms the expansion of the Help to Buy equity loan and the Help to Buy ISA announced in the budget and takes up the previous Labour promise ‘to double the number of first-time buyers’. . It also claims that existing home owners will be helped by the government’s long term economic plan which will ensure that mortgage rates will stay lower for longer, though not specifying how low or for how long. There is however no recognition that in many parts of the country house-prices are far above the level affordable by many working households, even with the support of these new initiatives.
The Tories reaffirm their enthusiasm for custom build and self-build, aiming to double the number built by 2020 and carrying forward their plan to legislate to require councils to allocate land for self-builders and self commissioners, of limited use to lower income households in urban areas where the cost of land for a new home may be a little bit out of reach. The Manifesto reaffirms the commitment to protecting the Green Belt, attacking the former regional spatial strategies for deleting green belt – not as far as I remember a point made at the time they abolished them – a bit of retrospective justification here. It is somewhat curious that the manifesto then reaffirms its support for garden cities, presuming that they will only be on brownfield land, which rather limits where they could actually be built. It is also stated that where new developments are to be granted planning permission, that residents will know that infrastructure such as schools and roads will be provided – though again it is unclear how they will be paid for. There is no reference to land acquisition or planning gain. There are references to the London Land Commission and the Mayor’s housing zones which have already been announced. The final sections of the housing chapter refer to keeping rates low and opposing the new Labour tax on family homes – I can only assume that the term’ family homes’ is referring to those over £2m in value to which the mansion tax would apply. There is also a new proposal that councils would have a 10% equity stake in public sector land sales in their area, which presumably applies to sites sold by government departments such as the Ministry of Defence and possibly NHS trusts. This initiative should be welcomed, if this is what it actually means – though the 10% proportion seems a little arbitrary. There is also a general reference to promoting localism through financial incentives, such as councils keeping a higher proportion of business rates revenue.
With the manifesto focusing almost entirely on home owners and would be home owners – and on disposing of more council and housing association stock, it fails to recognise the realities of the housing market in much of the country –prices and rents rising much faster than household incomes. The proposals in the manifesto generally contribute to inflating effective market demand rather than increasing supply. There is no suggestion that prices and rents need to be held down if more households are to be able to access the market , and nothing about those for whom owning a home is not just a distant dream but a mirage. The manifesto says nothing at all about the private rented sector or about homelessness or about housing quality. There is nothing about where new homes can be built only about where they can’t be built. There is nothing here to get more investment into housing or to improve the condition of the existing housing stock. It is as if home-ownership was the only housing tenure, and perhaps for the Conservatives, that is their perspective. The policies in the Labour manifesto may be inadequate but at least they are in the main attempts to ease the housing crisis. The proposals in this manifesto will make the situation much worse.