"Mayday" for the homeownership consensus?

Article

20 July, 2016

Following the raft of recent ministerial manoeuvres, we consider what the post referendum regime might have in store for the housing sector. In particular, we ask whether the government's unyielding focus on home ownership is likely to continue unabated, or whether the new political players' will be more receptive to the clamour for a more balanced provision of different tenure types.

Current Policy

The current government's housing policy is embodied within the confines of the Housing and Planning Act 2016, which finally came into law in May after a turbulent and protracted cross chamber battle with dissenting peers. Amongst other significant changes, the Act looks to extend the Right to Buy to all housing association tenants, introduces "Pay to Stay" for council tenants who earn over certain thresholds, ends most lifetime tenancies, and strongly promotes the supply of Starter Homes.

The most determined opposition to the Bill sought to amend the terms of the Right to Buy extension in order to ensure that homes sold off by housing associations are not only replaced numerically, but replaced with homes that are "like for like". The motion was eventually defeated after several rounds of parliamentary ping pong but the rationale behind the resistance was clear - to promote the delivery of additional houses of all types and tenures.

At the time an exasperated David Cameron labelled the Bill's opponents as "enemies of aspiration", but the Lords' economic affairs committee fired back last week with the publication of their report into the housing crisis. Proponents of the report accused the government of "trying to play a game of golf with one club" by ignoring social housing and rented properties and found that home ownership was simply not achievable for the lowest earners. As it stands however, the £4.7bn 2018-2021 housing grant programme does not provide a penny of funding for sub market rental properties.

Will housing policy now be reshuffled too?

Many in the social housing sector in particular are hoping that a change in personnel will signal a change in policy direction. The chair of the G15 group of London landlords, David Montague, typified the mood amongst housing association execs by calling for "a degree of flexibility so that we can adapt between tenures as the market conditions change".

In a speech given shortly before her selection as the new PM, Ms May referenced the housing deficit but did not emphatically reiterate the home ownership mantra of her predecessor, instead recognising that recent monetary policy had "helped those on the property ladder at the expense of those who cannot afford to own their own home".

In addition to a new Prime Minister, the subsequent cabinet reshuffle has led to new ministers in the posts responsible for housing policy. Gavin Barwell has replaced Brandon Lewis as Minister for Housing and Planning, a position that continues to be of "second division" status, forming part of the wider Department of Communities and Local Government now spearheaded by Sajid Javid.

First impressions of the new ministers in charge are not particularly encouraging for those seeking change. Both have a history of "nimbyism" in their own constituencies and Mr Barwell currently opposes a new Persimmon development in Croydon. His voting record on housing matters may also be a cause for concern, having voted against reforms to the housebuilding industry and the promotion of longer tenancies. Mr Javid's first tweet in his new post suggested more of the same with a commitment to "increasing home ownership".

It is of course unfair to prejudge the ministers' intentions before they have had a chance to set out their stall in detail, and if Ms May diverts from the Cameron/Osbourne agenda her ministers may follow. The outlook should become clearer over the coming months, although the inevitable priority of Brexit negotiations means that the haze make take some time to clear. Indeed, even if the new protagonists do desire a change in policy direction one wonders how long it will take for the necessary Whitehall resources to materialise.

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