People want action on housing, not words

Theresa May stood before a representation of a brick wall to deliver her speech yesterday on housing policy. It was an appropriate image. The country has been banging its head against just such an edifice listening to politicians down the years promising to solve “the housing crisis”, only to fail abjectly. Identifying problems that are holding up house building or pricing young people out of the market is not the same as doing something about it.

Is Mrs May the latest to promise much but deliver little? She said that young people “are right to be angry” at not being able to buy a home. But acknowledging their grievance does not make a house any more affordable and there was little in her strategy that would. Moreover, it depends on where the young person lives.

In many parts of the country, housing is relatively cheap. In London, the South East and in several other areas it is impossibly expensive. This is more a function of the imbalance of our economy than a failure of planning. In popular areas the laws of supply and demand push up the cost of all housing. It is unlikely that the supply of housing in London could be sufficiently expanded to reduce prices to “affordable” levels without a large-scale emigration from the city.

Many of Mrs May’s prescriptions are familiar because they were in the Government’s white paper on housing. Local councils are to be put under pressure to ensure plans are fulfilled and homes built. Even so, there are more than 420,000 homes with planning permission waiting to be built.

In addition, one in 10 homes on major sites will be available for “affordable” ownership and there may be automatic rights for homeowners to extend upwards, though this will encourage people to stay put rather than sell. The Government has the power to pass legislation to enforce policy and could order the building of the new towns promised for the past 20 years but never built. It can influence regulators who have imposed rigid post-crash limits on borrowing, which are preventing many would-be buyers getting on the property ladder. Mortgages today are cheaper than ever. It is often the inability to raise the deposit and pay the stamp duty that is the biggest obstacle to ownership, yet we heard little from Mrs May that would address these impediments. It is dangerous to encourage young people’s anger unless solutions are proposed to assuage it.