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For a week that ended with a crowd-pleasing speech from the Conservative Party leader but little new policy substance, there was one notable exception. UK Prime Minister Boris Johnson’s government seems to have done a U-turn on its controversial “once in a generation†reforms to Britain’s house-building plan announced in August 2020. Whatever comes from the policy rethink will have implications both for Britain’s housing market and possibly the Tories’ political fortunes.
For years, successive British governments have pledged to address the housing problem principally by building more homes. The implicit assumption was that a crisis in affordability that leaves so many priced out of the housing market — one of Europe’s most expensive — stems largely from a shortage of supply. Johnson too promised to build more.
Driving up the housing stock, however, proved to be like running on sand. Communities in desirable areas didn’t want green spaces developed, transport crowded or their doctor’s offices stretched by newcomers. Builders blamed planners for blocking progress, though an oligopoly of big builders are themselves criticised for buying up land and sitting on permissions without completing development. There’s no separating housing from politics in Britain. It’s the single biggest component of most household expenditure. Some 65% of Britons own their homes, but the percentage is higher among Conservative seats. In the 2019 election, 57% of owner-occupiers voted for the Conservatives. Yet owning a home has become unaffordable for many. That’s especially true for young workers and those on low incomes.
Housing prices were roughly eight times median household income in 2020 compared to 4.5 times in 1996. No wonder there are over a third more Britons under-35s living with their parents than there were a decade ago. The Office for National Statistics recently warned that rising prices for homes and private-sector rental charges are driving low-paid workers away from certain areas of the country. They aren’t going to vote for a prime minister who doesn’t give them an opportunity to build a life where they want to live. If Johnson can’t build and attract a cohort of young home owners to the Tory ranks, the party will be stuck with an aging base of supporters.
The government promised to build 300,000 new homes a year and bypass reticent planners with an algorithm that removes a lot of their discretion. But Robert Jenrick, the housing secretary who announced that expansion, was shunted aside in the recent cabinet reshuffle. His replacement, Michael Gove, is responsible for the whole of Johnson’s “levelling up†agenda — which remains ill-defined but is largely about rebalancing Britain’s lopsided economy so there is more opportunity in the poorer north of England. Gove’s party conference speech didn’t mention the Jenrick plan; and Johnson himself reassured the traditional Tory voters in the south that their open spaces will remain pristine.
There is a political justification for dropping the original plan. In June, the Tories lost a by-election in the well-heeled commuter towns of Chesham and Amersham, where opposition to what was referred to as the “mutant algorithm†reached a fever pitch and helped drive voters to the Liberal Democrats. Some Conservative lawmakers were already fidgety about the idea. What if Labour voters moved into Tory strongholds and weakened the party’s grip? What if the Lib Dems drove up the middle as they did in that election?
—Bloomberg