The Liberal Democrat Party conference is getting underway this weekend amid growing concern over an impending housing bubble – something Danny Alexander was quick to dismiss at today’s SMF fringe event on growth.
While some Liberal Democrats, such as Vince Cable, have expressed scepticism about Help to Buy – even going so far as to suggest that it should be scrapped – Danny Alexander was bullish about the need for policy to focus on meeting people’s aspirations for homeownership.
But the housing problem is much wider than this and has – in historical terms – never seen such a low profile in the political debate. In a forthcoming report for the National Housing Federation, the SMF sets out analysis of Conservative and Labour party manifestos for general elections stretching back to the end of the First World War.
There have been peaks and troughs in interest (often determined by international and economic crises), but for a long period of time from the 1940s to the early 1980s, manifestos always contained a significant chunk on housing – sometimes up to a tenth of the entire manifesto. In contrast, in the past decade, the proportion dedicated to housing hovers around 2%. This reinforces other evidence that indicates that housing has become a much lower priority for the population and politicians over the last century.
Chart: Proportion of election manifestos dedicated to housing
The 1960s saw housing in the ascendant in the political debate, with parties competing against each other in promising ever dizzying levels of house building. In 1966, the two parties were promising to ramp up house-building to 500,000 a year. In fact, house-building peaked at just over 400,000 in the UK as a whole and 350,000 in England in the late 1960s. But this is still well above today’s levels, and, if this could be replicated once more, would be more than enough to satisfy projected demand of around 230,000 new households in England a year. So it is certainly possible for us to build enough.
But is the political will still there? Bad and inadequate housing was described in the 1966 Labour manifesto as “the greatest social evil in Britain today”. In the Conservative manifesto of the same year, it was promised that a Conservative Government would make use of “every new method that works to get the houses up and keep the prices down”.
‘Keep house prices down’ – that’s one thing you tend not to hear politicians talking about nowadays, at least explicitly. Despite the fact that supply isn’t keeping up with demand – resulting in increasing unaffordability – a large proportion of the population are now homeowners who feel that they benefit from house price rises. For this group, keeping prices down isn’t likely to be a vote-winner (although doing the opposite might be). The role of house prices in consumer confidence and spending also means that politicians have to tread carefully, especially in times of economic uncertainty.
So what can we expect to see in the 2015 manifestos? Home ownership levels have slightly dipped in recent years. But voters’ aspirations to own their own homes have not gone away and it will be hard for politicians to ignore this. Indeed when Danny Alexander was pressed on this issue this evening, boosting homeownership was clearly his most pressing concern, with increasing the scale of social housing a much lower priority.
The danger of this kind of approach is two-fold. First, that this focuses politicians on ways of keeping homeowners happy whilst supporting more people to get on to the housing ladder. This often leads to demand-side measures such as Help to Buy, which risk pushing up prices without boosting supply at all. The second is that it stifles debate about the root cause of our affordability problems: simply not enough housing supply.
Given that private housebuilding of the level we need today has not existed since the 1930s, manifestos will also need to focus on other ways to boost supply. That might be more social housing or more private rented accommodation, both issues that were historically covered in manifestos alongside homeownership.
Throughout the party conference season we’ll be debating the important role played in policy by one “m” word: markets, and will also be provoking discussion on another “m” word: manifesto. Follow our blogs, regular email bulletin and the M Word competition to find the best manifesto idea, and stay in touch with us via the #mword Twitter hashtag.