Is this a radical plan for blowing smoke and bubbles?

Politicians love blowing their own trumpets. Well, they’re never going to declare their efforts mediocre and startlingly unoriginal when they can use words like “radical” and “unashamedly ambitious” even if those sat in the commentary box are shuddering with déjà vu – does that mean the Housing Strategy is nothing more than a damp squib? Mark Cantrell reports.

Been there, done that, chewed a hole in the policy document. The thing about the Government’s Housing Strategy, launched to such fanfare last month, is that it’s eerily – dare one say drearily – familiar. Indeed, in some respects it has a rather New Labour hue in places, albeit washed over with a suitably Tory rinse.

The document codifies and consolidates the Government’s programme to date. It largely reiterates previous announcements, reinforces the message on already established programmes, and otherwise promises, well, much the same. Nonetheless, the strategy has won its supporters but it has also drawn daggers of criticism.

The Government’s grand design for laying the foundations of a housing solution is “tinkering at the edges” and “misses a trick”; it “cruelly raises false hopes” and is far from robust. On the other side of the fence, it is a “good start”, a “small step in the right direction” that “sets out clear measures” and provides a “coherent and long-term vision”.

Politically, there’s been thunder – there usually is – with Labour lambasting the Government. Shadow housing minister Jack Dromey said: “There is a human cost to this housing crisis: the damp flat where the baby is always ill; proud parents desperate because the kids they love cannot get a mortgage; small construction companies struggling to stay afloat; unemployed building workers desperate to get a job. Those people have had enough of false dawns, grand plans and press launches followed by
broken promises and a failure to deliver. Sadly for them, a decent home at a price they an afford has never been further away than it is today.”

Trades unions, whose members are likely to be at the sharp end of the housing crisis both in their working and family lives, are scathing about the strategy too. UNISON called for more long-term investment in the housing sector to boost jobs, the economy and “give people hope”. Construction union UCATT accused the Government of “tinkering at the edges” and failing to address the biggest issues, such as the demand for social housing as indicated by the high waiting lists.

“The housing crisis is not going to be resolved until the G overnment builds sufficient social housing to meet the needs of the population. By building new social housing you provide jobs for construction workers and help kick-start the industry,” said acting general secretary George Guy. “Introducing mortgage indemnity schemes and increasing Right to Buy discounts are at best window dressing and at worst could be creating further long-term problems in a housing market which remains overlyslanted towards private occupiers.”

Dave Prentis, UNISON ’s general secretary, said: “For the millions of people on waiting lists, living in unsuitable homes, or struggling to get on the housing ladder, the Government’s latest bid to tackle the housing crisis does little more than cruelly raise false hopes. The level of demand for affordable homes is outstripping supply at a rate of two to one. The Government’s dogmatic refusal to spell out the extent to which their measures will address this gap does not give any serious grounds for optimism.”

So what of the housebuilding industry? By and large – not unsurprisingly – it is at least cautiously pleased with the package the Government has put together. “The Berkeley Group welcomes this innovative initiative [mortgage indemnity] which will enable people who can afford the ongoing cost, but not the high upfront deposit required by today’s market, to acquire a newbuild home,” said the group’s managing director Rob Perrins. “As important is the stimulus to the wider economy. A strong
housing market creates jobs and is such an integral part of consumer confidence for the UK .”

Crest Nicholson’s chief executive Stephen Stone said: “A healthy housing market is critical to the success of the economy, but restrictions to the mortgage market in the last few years have significantly hindered the rate of recovery. The Government’s proposed support of a mortgage indemnity scheme will give a vital boost to the market, doing much to unlock the funding restrictions facing the sector. The plans will be very much welcomed by the industry, and the expectation that such a scheme will generate a significant uplift in new home production is hugely encouraging.”

The focus on mortgages and private sector housebuilding is all very well, but there are people who cannot afford to buy a home at all – and who are struggling to cling on to a private rental place where rents are themselves bubbling up. And of course with some 4.5 to 5 million people waiting for a social home, there seems little scope for the outcasts from the private sector to find salvation there, certain housing and welfare reforms notwithstanding (but that’s another story).

So what’s in the strategy for public and social housing? Little in the way of carrots, it appears, more a case of short shrift and stick – or as the Government likes to put it “fairness” and “flexibility”. Sure, councils are to get their long-awaited settlement – and added debt burden – courtesy of the reform of the Housing Revenue Account system but they also face the prospect of being forced to sell off their remaining stock at as much as a 50 per cent mark down on values. That hasn’t gone down well.

The Tories are somewhat less ‘messianic’ in their fervour for homeownership than their Labour predecessors in office, but they are certainly no less committed to the tenure, and the strategy’s ‘main event’ is its heavy emphasis on helping struggling buyers get on the increasingly greasy property ladder – or if one wants to be cynical (as many are), it’s a strategy to provide a State-sponsored girdle for a sagging private sector, be they lenders or developers.

For the IPPR, the Housing Strategy is a nifty means of chucking some public money at big developers; good for the company balance sheets, not so hot on triggering the delivery of the 250,000 new homes it estimates we need year on year.

“We are still suffering from an economic crisis that arose in large part because of the bursting of housing market bubbles around the world. To start subsidising access to mortgages again is to forget all the lessons of that crisis. It is not the way to pump-prime sustainable growth in housing supply,” said N ick Pearce, a director at the thinktank.

“The Housing Strategy set out ways to get land and money to developers but it does not ask enough of them by way of quid pro quo. It seems unlikely that the development industry will respond to these subsidies and build enough houses.”

Karen Armitage, chief executive of Stafford and Rural Homes (SARH), said of the strategy: “Home ownership is once again the central theme with support to be provided to those who maybe cannot afford to buy houses at the inflated prices they are for sale at or to maintain them. The strategy doesn’t ‘kickstart’ an affordable solution outside of home ownership in any meaningful way. That needs to be facilitated by encouraging local housing associations and local people to commit to rented and owned housing in mixed communities.”

Shelter’s Campbell Robb said: “This strategy also does almost nothing to help the growing number of families living in insecure private rented housing with hardly any protection from rogue landlords or unexpected rises in rents. Unfortunately these aren’t the bold and radical solutions we need to solve a housing crisis that’s been decades in the making.”

The Government may hope its Housing Strategy can pull a magical solution out of the hat, but for many commentators it won’t be so much a rabbit – more a dead parrot.