Home purchase is now so far out of reach from them that well under 30% of young people now own their own home and the vast majority of those that do needed help from their family. Without family financial support house purchase has become virtually impossible for the first time buyer. Properties that are within their price range are very rare and many of those are bought up by buy to let landlords with much deeper pockets.
Hammond will be claiming that he is helping young home buyers by allowing building firms free range to build whatever they want on Green Belt land. He is wrong. This kind of building does nothing meaningful to help increase the supply of properties young people might be able to buy. Builders can make more money by selling 4 and 5 bedroom executive homes to those who already have equity than they can by building one and two bedroom properties so left to their own devices they will build properties almost no young people can afford. Many local councils want to stop them doing this and force them to build what local people actually need. The Conservative central government seems determined to force those councils to cover heritage landscapes with buildings that contribute nothing helpful to resolving the homes crisis. Increasing borrowing in order to build on the Green Belt is an excellent way of helping building companies that make heavy donations to the Conservative Party to increase their profits. It isn’t remotely a means of helping local councils and housing associations to build for need.
The government’s much vaunted Help to Buy Scheme is similarly ill judged. Help one person to buy an affordable home and all you do is put the price up for others. Government money is therefore being wasted on rising house prices. When there is no meaningful increase in the supply of affordable homes the only thing the scheme can possible change is who can buy the existing supply. Help to Buy is quite simply an astonishing waste of public money on propaganda politics.
So the majority of young people without family help will continue to be reliant on the rental market. I expect the budget to also make a lot of noise and fuss about some small improvement in the security of those renting a home. No one should be fooled by this for a second. Nothing forceful will be done to get the balance of rights and responsibilities remotely equal between landlord and tenant. Too many of the worst and most narrow-minded landlords belong to the Conservative Party and will fight hard to protect their own interests. At the moment anyone bringing up a family in a rented home has 6 months security of tenure unless the landlord chooses to be more generous. If the government really wanted to help young people it would radically change that and give some acceptable level of security to young families. Don’t hold your breath on that happening.
The two parts of the system that do provide homes on a longer term more secure basis and at reasonable rents are the local councils and the housing associations. Yet those organisations are desperately short of property and can’t remotely meet existing need. Letting those organisations borrow money to build what is needed really would be a big help. But if they are going to be allowed to do so they must also be protected from the risk of losing what they have just built. Ever since Margaret Thatcher council homes have been sold off at cut down prices and the stock of these homes has been frittered away. There is nothing wrong with a tenant having a right to buy their home at a market price. Indeed it would be good to extend that right to the private rental market. Allowing anyone to buy their home cheap is, however, a huge problem for the wider community. It means that councils can’t feel confident about building and has been the prime reason for the last 3 decades why there are fewer council homes available for those who need them every year. Instead of accepting that Thatcher was wrong on this and young people are now suffering the consequences the Conservative Party is ideologically wedded to the concept that it is somehow evil for the public sector to own significant numbers of homes and use them to help those who can’t afford to buy. Instead of realising that any good side to the right to buy policy has long since gone and it badly needs to be dumped the Conservatives keep trying to force the same nonsense on Housing Associations. Put simply it comes down to this. All the noise about borrowing to build is useless propaganda until the Conservatives let local councils build and insist on all sales of public housing taking place at a fair market price and the homes being replaced.
This is the problem for the Conservative Party. It is ideologically incapable of moving on from an outdated era of ultra-free market policies. The housing market cries out for more public control. Local planning committees in attractive areas need the power to stop builders going for cheap and easy green field sites. Councils in deprived ones need resources to help developers transform run down inner cities into nice places to live with good schools. Neither is being helped to do so because the Conservatives don’t like government planning. And they like local or European planning even less than they like it nationally.
This is a touch difficult for anyone dealing with the housing market. It is simply impossible to manage the UK housing market without radical action by government locally, nationally and internationally. Sensible policy begins with heavy taxes on international investors and on empty properties. The taxes collected need to be used to support public sector borrowing to enable building of homes in more difficult and less profitable areas so that we can free up disused and run down land. Builders cannot possibly be expected to regenerate enough parts of our inner cities without help to tackle the challenge of the extra expense and there also needs to be support from government to create attractive and popular local schools in inner city areas. Similarly rental agreements can’t possibly be equalised without government intervention.
None of that is going to happen under a government determined to believe that markets fix every problem. Either the Conservative Party has to ditch the ideology that has driven it for decades or the housing market is going to carry on getting worse. Unless of course the Conservatives get kicked out of office for their incompetence.