Why we need Help to Build, not Buy

The public recognises what too many politicians do not; that a mass Macmillan-style programme of housebuilding is the only solution to the housing crisis.

Outside of the Treasury, it is hard to find anyone who thinks Help to Buy is a good idea. Vince Cable, Mervyn King, the TUC, the IMF, the Institute of Directors and the Office for Budget Responsibility have all warned that the scheme –which allows borrowers to take out a 95 per cent mortgage, with the government backing part of their loan –will inflate demand without increasing supply and create the conditions for another housing crash.

If few doubt that George Osborne’s wheeze is bad economics, the consensus remains that it is smart politics. The logic runs that by widening home ownership, Help to Buy will enable the Tories to win over young, aspirational voters in the same way that Margaret Thatcher’s Right to Buy did a generation ago. In an attempt to emulate the images of Thatcher handing the keys to those who bought their council homes, David Cameron has asked staff to arrange for him to meet those who have benefited from the scheme whenever he visits a marginal constituency. Help to Buy is, he says, “about social mobility . . . about helping people who don’t have rich parents to get on and achieve their dream of home ownership”. He was keen to stress that the average price of a house bought under the scheme is £163,000, with most located outside of London and the south-east, and that three-quarters of the 2,384 applicants are first-time buyers (a quarter, it follows, are not).

The Tories believe that they will derive another electoral benefit as rising prices create a feel-good factor among existing owners, 45 per cent of whom voted Conservative in 2010. Osborne is reported to have told the cabinet: “Hopefully we will get a little housing boom and everyone will be happy as property values go up.”

This vision of a nation hooked on the narcotic of rising prices is at odds with reality. A poll last month by YouGov for Shelter found that 66 per cent of the public do not want house prices to increase. That figure is up 8 percentage points since June, the period in which Help to Buy was fully launched. This trend holds among outright homeowners (67 per cent of whom want prices to fall or stay the same), Conservative voters (65 per cent), Labour voters (66 per cent), Liberal Democrat voters (73 per cent), readers of the Daily Mail (66 per cent) and readers of the Daily Express (65 per cent). Chastened by the experience of the crash and anxious at the lack of affordable housing for the young, the public no longer views rising prices as an unqualified good.

If the impression develops that the government is focused on maximising prices at the expense of supply, Help to Buy could prove to be a net negative. The number lifted on to the property ladder will be matched or exceeded by the number for whom the idea of owning their own home moves ever further out of reach. And those unable to buy will resent subsidising mortgages for properties worth up to £600,000 –more than three times the national average.

The public recognises what too many politicians do not; that a mass Macmillan-style programme of housebuilding is the only solution to the housing crisis. Merely to keep pace with the rising number of households, the UK needs a minimum of 1.5 million new homes to be built by 2020.

Yet in the same week that ministers lauded Help to Buy, government figures showed that the net supply of housing rose by just 124,270 in 2012- 2013, a fall of 8 per cent since 2011-2012 and the lowest number on record. It is Help to Build, not Help to Buy, that Britain needs. The Tories should not assume that their disavowal of this will go unpunished.

Why aren't we building enough houses? Image: Getty

George Eaton is political editor of the New Statesman.

This article first appeared in the 13 November 2013 issue of the New Statesman, The New Exodus

Photo: Getty Images
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The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.