Cameron's housing pledge: making promises for others to keep?
04 March 2015 -
With the division between property owners and “Generation Rent” widening, how authentic is the prime minister’s promise to build 200,000 starter homes by 2020?
Housing has been on the agenda this week, with widespread media coverage of David Cameron’s election “promise” to build 200,000 starter homes by 2020. It’s good to see housing so high on the list of political issues. Both parties have a tendency to leave it on the sidelines. Labour had nine housing ministers in the 13 years to 2010, which hardly helps follow through on policy. And against a backdrop in which the ever increasing wealth of an older, property owning demographic compares starkly with the prospects of “Generation Rent”, it’s an issue with far-reaching implications.
But is the prime minister making the correct promise – and is it one he can keep?
To the first question, he must believe that voters will answer a resounding yes. And to the second? Well, if it’s his problem at all, it’s not one to worry about for the next five years.
The Conservatives have pledged to build these homes for first-time buyers by making more brownfield land available and cutting developers’ costs. This is done by removing the financial commitments put on developers to meet local infrastructure requirements or build social housing. The Conservatives say homes worth £250,000 outside London - or £450,000 in the capital - would be eligible for the scheme.
So does the policy stack up?
Charities and social housing groups seem to be saying no. Gavin Smart of the Chartered Institute of Housing said that the Tory plan, “smacks of building for one group of people at the expense of another.” Then there are questions on cost – presumably, the public sector will have to put more in the pot for the infrastructure required to develop the sites and contribute more to affordable housing or accept it won’t be built. And there are further questions on whether the policy will really make a difference for the particular first-time buyers for whom it is designed.
In London, for example, GLA figures show that the ratio of house prices to household incomes is 13 times in inner London and nearly 10 times in outer London. Other figures from the organisation estimate median household incomes of nearly £37,000 in inner London and £35,000 in outer London. This suggests that the £450,000 price cap is pretty much exactly in line with the average ratio playing out in inner London, and greater than the ratio further out. If houses are already available at those ratios or similar (which means homes are completely unaffordable for most), then what will result from the policy other than a cutting of developer costs? Expectation that those savings would lead to a higher quality product? You’d certainly hope so.
The promise itself is a reminder of the expectations we allow ourselves to have of politicians and (to be generous) the way in which their words are interpreted and reported. No party can “promise” housebuilding numbers of any sort, unless they want to take absolute control of the process with public sector building programmes – as was the case during the 1950s and 60s, when housebuilding in England hit an all-time high. The prime minister’s promise is about the way in which his party plans to encourage developers, but whether that encouragement delivers results depends upon the actions of the developers themselves. That “promise” is one entirely at the mercy of events. We should apply a similar check to other election pledges as the race picks up.
Jon Bennett is managing director of corporate communications consultancy Linstock Communications.
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