After years of being neglected, like your least favourite grandparent a la Grandpa Simpson, housing may be about to jump up the ratings for the electorate. This is good for people like me who have an unnatural interest in housing beyond merely getting on that mythical ladder to happiness, owning a home. As the lovely Graph Type Thing (1) below shows, housing has not been at the forefront of people’s minds (caveat, this is from an Economist/Ipsos Mori Poll and therefore unlikely to be a representative sample of Great Britain). However times, they are A-changing.
Graph-type thing (1) Issues Facing Britain 2013
As part of his party’s cost of living crisis approach, today Ed ‘people think I’m a bit weird’ Miliband announced a cap on the amount landlords can raise their rents by. Obviously it will only be implemented if Labour win the next General Election (bit of a long shot then) but it highlights their belief, and mine too, that people are getting concerned about housing in general. In the monthly Economist/Ipsos Mori polls housing has been steadily rising as a concern (in percentage terms).
Although I broadly agree with the cost of living crisis narrative, it’s hard to get behind someone who, although is highly intelligent, has all the charisma of a wet sponge. It is much harder however to get behind the idea of rent controls. Whilst limiting the amount rents can go up by each year sounds like a good idea on paper, in practice it isn’t. It is a cure for a symptom,not the underlying illness. Alas like many of Labour’s policies post 2010 it is about as watertight as the beaten up Clio I drive (spoiler alert, my car leaks like a sieve). We need more housing. Lot’s more of it – big houses, little houses, even those weird ones you see on Grand Designs, although maybe a bit more practical. I always wonder how they will clear off the cobwebs from their monumentally high ceilings. To illustrate this point Graph Type Thing (2) charts the steady decline in housing completions over the last few decades.
My sincere thanks goes to Steve Wilcox et al, for carrying out the UK Housing Review. It helped me immeasurably in both my under-grad and post grad studies and is a constant source of reference when showing people how crap our ability to build is.
Graph Type Thing (2) – Housing Completions by Sector – UK
Hopefully you get the picture. But to (again) state the blooming obvious we aren’t building enough houses. Private builds and Local Authority builds are much lower than previously seen. Indeed, Public Sector completions are positively M.I.A. Considering it is estimated that the UK needs around 200,000 new homes per year, we are in trouble big time. Why does this matter? Well it’s basic economics, stupid. High demand + low supply = very high prices. Putting a cap on rent rises would only serve to mildly dampen a very hot housing market. It is a poorly constructed sticking plaster to a dam that may well burst its walls soon. It is however an interesting political gambit. The cost of living crisis took most people by surprise when it actually registered with the general public. A rare success with the Labour Party. Whether this move will do the same remains to be seen. At any rate unless we can get all sectors building again the rise in house prices won’t change, unless the market collapses, again. Who says history doesn’t repeat itself. To highlight our current lack of building ability I point to final Graph Type Thing (3), Average House Prices in the UK since 1970.
Graph type thing (3) Average House Price – UK
The Coalition isn’t helping much either. Help to buy simply ratchets up demand even further, whilst again not solving the fundamental problem. Sure a few more people get on that awesome housing ladder but the supply is still woefully short. In the meantime they are praying the private sector will suddenly build loads of houses. Whilst concurrently making it even harder for social housing organisations and councils to do so. The next round of capital funding for social landlords will probably be so small we may have to do a whip-round. I personally volunteer to wash cars in a bikini if it helps.
Quite what Osborne et al. are thinking is beyond me. Actually it isn’t. There’s an election next year and a feel good factor from a hot housing market may just scrape that bunch of otherworldly weirdos, who make up today’s Conservative Party, into another term in charge.
Ho hum, got any change?
One more thing
Before I dive off I would like to highlight a campaign I believe any self respecting housing professional should get behind. In response to How to Get a Council House and Benefits Street the good chaps and chapesses at Council Homes Chat have been running an awareness campaign. One to show the true face of social housing. In particular, getting people to give their own personal experiences of growing up in a council and/or social housing property. To add your support simply Tweet using the hashtag –
#CouncilHomesChat and follow @Councilhomechat or go to www.councilhomeschat.wordpress.com for their blog.
**Correction – My thanks to Ben from Ipsos Mori for correctly pointing out that the figures from the Economist/Ipsos Mori poll related to Great Britain and not the UK. Incidently I am reliably informed that the poll is nearing its 40th Birthday. Bon anniversaire in advance! Here’s to another forty years.