Private renting and house price levers

Steve mentioned in the IPPR work in his last post. I made it along to the launch seminar, where Caroline Flint and Grant Shapps’ Parliamentary Private Secretary Jake Berry were speaking.

Jake Berry is a rare thing in the Conservative Party – someone interested in housing and someone with a background in it. He was also clearly well up to speed on government policy. Something that not all PPS’s focus on. Unfortunately, it also meant that he shared the same fallacies as his boss.

Pressed on the boom and house price rises, he echoed John Healey (oh and Grant Shapps) in saying that a house is a home, not an investment and referred to the need to keep prices in control.

When pushed on what ‘levers’ the government had to do that he mentioned three things:

  • Liberalising planning laws,
  • Abolishing housing targets and Regional Spatial Strategies, and
  • The New Homes Bonus

He clearly assumed that a flood of new supply would keep prices down (and indeed that these measures would deliver it). He can only hope that the restrictions on mortgage lending stay in place long enough for this new supply to flood the market. Otherwise, as soon as lending loosens again, prices are back on their way up.

The idea that we can get enough new supply built quick enough to affect house prices is clearly non-sense.

So in the short-term prices will remain high and mortgage lending tight, meaning bad news for first-time buyers.

Caroline Flint made a big point of the importance of improving the private rented sector and went beyond Labour in government, arguing we should consider longer-term tenancies in the private rented sector and greater security for tenants.

Caroline of course would support the principle that people who want to own their own home should be able to and should be supported to. However, I wonder if she isn’t more realistic than the government and is looking at what will really improve the lives of younger people in the housing market.

Private renting is commonly seen as for the young and the poor, but it will increasingly be the option for those on middle incomes for longer periods and their rented property may be where they look to start a family. With aspirational voters finding themselves priced more and more out of homeownership, it’s a good time to win support for measures to improve the private rented sector for them and everyone else.

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