Housing is arguably the second biggest political hot potato for this Government after Brexit.
Getting it as wrong as they currently are will surely lead to defeat at the next election. This will be a defeat fuelled by an angry generation of resentful aspirants, whose home-owning dreams have been shattered by an administration’s failings to provide enough adequate housing stock – with prices ever out of reach as a consequence.
In previous Budgets, we’ve heard successive announcements of what, at first glance, appear to be big money injected into the system to aid the supply of new homes; social housing initiatives; brownfield decontamination funds; garden towns and villages; funding for self-builders and small developers; improved planning processes; rent to buy and so on. Announcements that, in my view, have largely evaporated soon after they’ve left the red briefcase, but at least they demonstrated an acknowledgement of the need to fix the broken housing market.
Yet in this Budget, we saw little to placate those like me that are baying for action on housing. No big cheque. No fancy initiative. Nothing but a £500m pot to assist the Housing Infrastructure Fund to deliver 650,000 new homes. As this was also light on detail, it will no doubt amount to just another meaningless piece of rhetoric. The same goes for the tiny hat-tip to the small number of Shared Ownership property buyers that are now alleviated from stamp duty at a full value equivalent of £500,000. No big deal at all.
A particularly irritable element in Monday’s speech was the Chancellor’s statement that his colleague Oliver Letwin had concluded in his research that the big housing developers are not land-banking. Frankly, this is naive in the extreme given the evidence that shows that the largest 15 housing developers own or control over 600,000 plots, either with or likely to achieve planning permission, versus just 90,000 homes built each year by those same companies.
The number of land-banked plots is rising, whereas the level of new builds being completed each year is static (just 184,000 new homes last year, woefully short of the Government’s target). The void between what is held and what is delivered is vast and, if eliminated, would solve the housing crisis immediately.
These developers should have been brought to task on Monday and their increase in profits since 2013, fuelled by a misdirected Help to Buy scheme, should be better scrutinised and dealt with. One can only wonder why a political party that relies on donations from housebuilders allows them to continue to stick their fingers up at would-be home-buyers, whilst boosting their own profits at the taxpayer’s expense.
Moreover, one has to speculate that ever-rising house prices are indeed favoured by our political masters, hence the perpetual imbalance whereby demand is ever greater than supply. After all, a fall in property values and a reduction in owner equity is hardly a good look when out on the campaign trail in wealthy middle-England with one’s base. Conspiracy theory notwithstanding, Hammond missed a pre-Brexit trick this week and has not only shown political culpability but has abdicated social responsibility, too.