Here is the good news: the Conservatives will go into the next election with a clear appeal to younger voters. They will widen home ownership by liberalising planning restrictions to increase supply, thus making housing more affordable. In the recent Conservative leadership contest, this was the view of both Kemi Badenoch and Robert Jenrick.
The housing shortage is not just a British issue. Those with a keen interest in current affairs will have spotted that Donald Trump won the US presidential election last week. His platform includes the following:
To help new home buyers, Republicans will reduce mortgage rates by slashing Inflation, open limited portions of Federal Lands to allow for new home construction, promote homeownership through tax incentives and support for first-time buyers, and cut unnecessary regulations that raise housing costs.
Next year, the Conservatives are likely to sweep to power in Canada and Germany with a similar message. By contrast, the comparatively anti-development electoral pitch by the Conservatives in the UK this year did not go well. The victorious Labour Party, on the other hand, promised a package of radical planning reform and 1.5 million new houses. That outcome is hard to dispute, even if the Government ultimately fails to deliver on its plans.
The tricky part about conveying a message that building more equals lower housing costs is convincing those like myself, who are fortunate to own property, to accept becoming less wealthy. ‘Suck it up,’ the young people in Generation Rent might respond. But we existing homeowners are not a trivial cohort. There are 15.6m owner-occupied households, according to the latest stats I could find. That’s nearly two-thirds of all households.
Most awkward. Thus the politicians retreat into platitudes – fooling no one and pleasing no one.
What is the answer? How can the Nimbys be turned into Yimbys? I don’t think they can all be bought off. But here is my eleven-point plan to placate as many of them as possible.
Design code
There is nothing inevitable about new buildings being ugly. But usually they are. So Nimby suspicion in this respect is entirely understandable. Beauty is in the eye of the beholder. Alright – let’s poll the beholders. Let’s have local design codes that offer popular consent of what development should look like. What actual numerical evidence do local authorities have (if any) on what types of built form, material, typology and style local people prefer? If they don’t have any such evidence, what plans do they have to undertake some proper research – using pictures and polling to get a usable and meaningful understanding to publish the results and to make use of this evidence to inform the council’s strategy and development-control decision-making?
Street votes
Often we think of increasing the housing supply as meaning new buildings. But it can also be achieved by expanding the space in existing buildings. We can have street votes to allow mansard roofs and cellar conversions to create basement flats that can enhance the asset values for existing homeowners while also easing the shortage of accommodation. Why should the municipal bureaucrats be allowed to thwart it?
Turn empty shops into homes
In this era of growing internet shopping, we have too many shops on the high street, a great number of which are closed. Why not ease the change of use rules to allow more homes and diminish the blight of boarded-up properties on the nation’s high streets? Would the Nimbys really object to that?
New homes bonus
This is a grant to local authorities based on the amount of new homes provided in their area. They don’t have to be recently built, but can include converting buildings that were previously shops or offices. Alternatively, empty derelict homes could be brought back into use. Central government could increase this grant while reducing other grants to local authorities. That would be revenue neutral but increase the financial incentive for councils – and council taxpayers – to back development.
Make the green belt green again
I did some research earlier this year, via freedom of information requests, and discovered that 54,000 acres of green belt land was contaminated. Would the Nimbys object to replacing land within the green belt that is not merely ugly, but poisoned, with land that has been restored to health and can be used to provide beautiful housing and gardens? Or if some of the other monoculture gave way to a bit of housing intermingled with forests, woods and hedgerows – a habitat where nature could flourish?
Council estate redevelopment
Some of the ugliest housing in the country can be found in the slab blocks and tower blocks of our modernist Council estates built in the 1960s. This week, the Centre for Social Justice produced a report on how this anti-social ‘social housing’ contributes to loneliness. But also consider that high-rise does not mean high-density. The tower blocks are often surrounded by windswept wastelands. Classical mansion squares fit more people in. That would be a change that would be popular with the people who live in the estates and the surrounding area.
Sell surplus public sector land for development
Increasing the housing supply in this way offers a fantastic deal for taxpayers. One acre of development land provides comfortable space for ten family homes. Most of the cost of a new home is not the construction, but acquiring the land with planning permission. The Ministry of Defence alone owns 849,000 acres of land. Network Rail, an ‘arm’s length’ public body of the Department for Transport, owns 128,000 acres. All of this on top of the NHS, local authorities and an assortment of quangos. State land banking has been tolerated on the most scandalous scale.
As a modest start, the state could sell half a million acres with development rights – enough for a million houses. Perhaps they would sell for the average house price of £300,000 each, and the developer could keep half for construction costs, marketing and profit. That would be worth around £150,000 per house in proceeds for the Exchequer – or £150 billion for the million houses being built. A few million more and that makes a significant dent in both the housing shortage and the national debt.
Infrastructure bonus
Keen as I am on beauty, I accept it is not enough. The Duchy of Cornwall has some lovely plans for thousands of new homes in Faversham. The hitch? Brenley Corner, Junction 7 on the M2, is already jammed up and the locals don’t want it to be even worse. We need to be more transactional about road improvements, new schools, new GP surgeries and so on. If new housing is agreed to, then you go to the front of the queue. It will mean better public services and shorter journey times.
Abolish inheritance tax
Say that someone is rather rich and owns a house worth £1.5m and with this radical expansion of housing supply its values falls, over a few years, to £1.25m. What does it matter? Probably not much to their standard of living if they were settled there. The concern would be what they had to pass on to their children (or grandchildren, godchildren or nephews or nieces.) If inheritance Tax was abolished – explicitly as a quid pro quo for policies that lowered house prices – would that not sweeten the pill for the richer Nimbys?
Bring back mortgage tax relief
Picture someone a bit younger and poorer, not really thinking about death. They only bought last year after a great struggle to get on the housing ladder. The house cost them £500,000. The planning liberalisation boom sees it slide down to £400,000. Perhaps they risk negative equity. Let’s reinstate tax relief on mortgage interest for them.
Abolish stamp duty
A final tax change would be to abolish stamp duty. The state blunders in at present to disrupt the housing market in a way that harms buyer and seller. This reform would ease the transition of increased supply and greater affordability while helping to avoid a crash in prices.
Conclusion
Kumbaya. After following these simple steps, the Conservatives reclaim their title as the party of home ownership, satisfying the interests of those who have got there already as well as helping those who aspire to join them. Free market growth is allowed to flourish with a presumption of being able to build, subject to Burkean safeguards of beauty and community in the new settlements being created. There is no reason why the figures should not add up. In addition to the proceeds from the sale of state land, there will be considerable broader economic benefit if development can be made politically acceptable.
Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.
CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.
