The Conservative Party’s grip on office is loosening partly because of its failure to resolve Britain’s housing crisis after 14 years in power, leaving the government under pressure to improve its policy towards those hardest hit, the most vulnerable voters. young.
Despite the ruling party’s decades-long commitment to helping people get on the property ladder, homeownership rates have remained stagnant over the past decade. The government has not met its targets for new homes, while an era of low interest rates for most of the time since the Tories came to power in 2010 has exacerbated rising prices, making the purchasing a property unaffordable for many.
The end last year of the Help to Buy equity loan scheme, which had been a totemic Conservative policy, left Prime Minister Rishi Sunak looking for a flagship new housing initiative to attract aspiring homeowners and increase its popularity among future youth. of the general elections scheduled for later this year.
According to current polls, only a small portion of younger voters are likely to support the Conservatives. Recent YouGov research showed the Conservatives were only ahead of Labor among homeowners without mortgages – who tend to be older – while Labor has a strong lead among private renters, social renters and people with mortgages .
The Conservatives have “presided over a massive increase in the cost of housing for people renting or looking to buy a home since 2010, which has . . . it has fueled accusations by young people that they live in a gerontocracy in which they have been excluded from the social mobility to which their parents and grandparents felt entitled,” said Tim Bale, a professor of politics at Queen Mary University of London.
Sunak, Chancellor Jeremy Hunt and Housing Secretary Michael Gove have at times been at odds over which policies to push forward to try to boost home ownership levels as the Government prepares Wednesday’s Budget.
Gove has supported reducing stamp duty for both first-time buyers and older owners hoping to downsize, although Hunt is believed to oppose the policy on cost grounds. A plan to support 99% of mortgages for first-time buyers was under consideration, but officials say it is unlikely to come to fruition.
Nor is Hunt expected to reinstate Help to Buy with the chancellor wary of policies that would fuel demand for housing without encouraging more supply – fearing this could boost inflation.
The Conservatives have faced growing criticism over their approach to managing housing supply after an influential caucus of anti-development MPs forced the government to plan policy changes that experts said were likely to further reduce the number of homes built.
Lord David Willetts, a former Tory government minister, said the party needed to “make housing part of a strong offering” for younger voters.
“There’s a myth that somehow young people don’t have aspirations,” he said. “If you look at people’s aspirations, they want to own their own home, have a decent job with a living wage and be able to afford to raise their children – young people are not young Marxists.”
Opposition leader Sir Keir Starmer has sought to capitalize on the housing issue and appeal to younger voters with a pledge to make Labor “the party of home ownership”. As a party more dependent on urban voters, Labor is more comfortable promising a liberalization of the planning system than the Conservatives, with their larger base of rural supporters.
The number of first-time buyers has plummeted over the past year to its lowest level in a decade, largely due to sharp rises in interest rates and the relative resilience of home prices.
The recent hit from rising financing costs comes after a decade in which England’s home ownership rate remained stuck at around 65%, down from a peak of 71% in 2003, according to government data.
New research from CBRE shows that successive governments have fallen short on the supply side, with at least 1.5 million fewer homes built over the past two decades compared to targets set by the then Labor administration.
Jennet Siebrits, head of UK research at CBRE, said that “earnings have failed to keep pace with house price growth” in 20 years, meaning that “for young professionals, the dream of owning a home seems to be increasingly out of reach.”
CBRE said the average house price in England increased from 5.92 times average earnings in 2003 to 8.28 times in 2023. The average first-time buyer deposit increased from £22,600 to £68,700, rising from 0, 6 times average incomes at 1.2 times.
Starmer said Labor aims to return to 70% home ownership, with measures to boost housebuilding, give first-time buyers priority over new homes and identify sites for new towns.
Jennie Daly, chief executive of Taylor Wimpey, one of the country’s largest housebuilders, has warned against policies that do nothing but increase demand without increasing housebuilding. “There is no benefit overall to stimulating the market without making sure you also increase supply,” she said.
The Government said: “We are on track to build 1 million homes in this parliament, and our target of building 300,000 homes a year remains,” adding: “We have presented an ambitious long-term plan for housing which provides for the acceleration of system planning, reducing bureaucracy and reducing delays”.
Ahead of the Budget, Gove announced some planning policy interventions, including proposals to create a “presumption in favor” of development on previously developed land in large cities.
But a senior developer executive said Gove’s moves were mostly “recycling and tinkering around the edges. . . These are little levers that are pushed and pulled.”
Bale agrees that the recent wave of housing policy announcements has been “a case of too little, too late. . . It will take decades to solve this problem, if it can be solved at all. The idea that this could be done in view of the elections is delusional.”