Tories merge with Poundland

The Tory Manifesto was plainly written by Poundland, using the old Tesco mantra ‘pile it high and sell it cheap’.

The Tories have nothing to say to tenants – literally. Their housing policy for one tenure only – home ownership – tells us what has been wrong with housing policy for 40 years. You cannot have a housing policy that ignores that huge section of the population who are not and never will be home owners.

It is also the case that you cannot have an effective housing policy that fails to look at the inter-relationships between tenures. Despite all the talk in their Manifesto about believing passionately in home ownership, the Tories have no analysis whatsoever to explain why home ownership has been falling – for more than a decade and throughout their time in Government. If home ownership is their sole objective, they have spent a fortune – and failed.

In reality the Tories have divided loyalties, they are conflicted between competing views of capitalism. They like the image of the proud homeowner, and indeed that is what most of us who commentate on housing are ourselves. But on the quiet they are also the party of the private landlord – big time – and especially the buy-to-let landlord. They won’t admit that if it wasn’t for the buy-to-let market housebuilding would have been even more pathetic than it has been over the past five years. They won’t admit that the only way of seriously promoting first time ownership would be to restrain buy-to-letters (and probably foreign purchasers as well) who are competing for the same properties and bidding up prices due to their tax advantages. And they won’t admit that their stated aim: ‘Everyone who works hard should be able to own a home of their own’ is simply and flatly unachievable.

The way the housing market works, made far worse by Tory (and LibDem, let us not forget) demand subsidies, means that the closer aspiring home owners get to their target the further it moves away. The waste of billions on subsidies, loans and guarantees to help home owners is pointless and economically illiterate. First law of economics: if supply is unchanged, and demand rises, prices go up.

So they turn to their other obsession: putting the public sector’s assets up for grabs in Poundland. Or worse, this time they’re putting somebody else’s assets up for sale in Poundland. Now that really is innovative.

Others have written and will write about the damage done by RTB1 and the threat to housing supply from RTB2 – both in terms of re-lets lost and new supply undermined. But the biggest disgrace lies in the method by which this will be funded.

Their policy of extending the Right to Buy “to tenants in (surely ‘of’ – Ed?) Housing Associations to enable more people to buy a home of their own” will be funded by requiring COUNCILS to sell off their most valuable council houses as they become vacant.

Even if there was some logic to selling the most valuable homes, which there isn’t, Councils have a thousand higher priorities than using the money to pay £77,000 – £103,000 in subsidy to a housing association to fund the discount they will be forced to give to one of their tenants and then spend even more on building replacements. This will cost BILLIONS.

There are many unanswered questions. Here are some for starters.

  • The most valuable Council properties are concentrated in Inner London. Will those councils have to sell almost everything when it becomes vacant? How will they ever meet their own huge housing needs?
  • Half of all councils have no housing stock at all. What will happen in those areas? Or will this involve one council subsidising home ownership in another council’s area?
  • The housing impact of RTB1 was felt over many years through a reduced rate of letting – and a reduced flow of rent income. People who could have been in council homes instead had to live in temporary accommodation for years or in private housing. Both are hugely expensive indirect costs. Have the Tories even considered this?

After reading this evil stuff, do I have the strength to read yesterday’s Green Manifesto? Maybe, but regrettably it will be as relevant to what happens after the Election as this blog, which isn’t saying a lot. And later today we can read the LIbDems (who delivered not a single one of their own housing policies in five years of Government) and UKIP. The last one may prove to be the most extraordinary.

 

*My apologies to Poundland, a very fine institution, who may not want to be associated with cheap Tories.

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