No one has suffered more than Millennials from the shocking fact that there have been 20 housing ministers since 1997 and 11 since the Conservatives formed their coalition with the Liberal Democrats in 2010.
From Nick Raynsford and Hilary Armstrong at the dawn of New Labour through Keith Hill, Yvette Cooper, Margaret Beckett, Kris Hopkins, Brandon Lewis, Gavin Barwell, Alok Sharma, Dominic Raab and, yes, eventually Chris Pincher a parade of very talented Ministers; time-servers and even the disgraced have sat in the role.
Raab lasted six months and is best remembered for linking housing and immigration at the height of the Brexit debate, Sharma managed seven months and Pincher, before triggering Boris Johnson’s demise, was actually one of the longer serving housing ministers for two years until February 2022, although nobody can actually remember what he did in the role.
Throughout this turmoil none of the UK’s housing ministers have got close to solving a situation where 25-40-year-olds have been the biggest victims of a housing crisis that has seen annual home completions fail to come anywhere close enough to meet adequate first time-buyer supply.
So, it is no surprise that the Halifax, one of the country’s biggest mortgage lenders, recently revealed that house prices in the UK rose at the fastest annual rate in 18 years last month as demand continued to outstrip the number of properties on the market. Prices rose year on year in June by 13%, the highest since late 2004, and 1.8% compared with May, which was the biggest monthly rise since early 2007.
The people who are hardest hit by all of this are those trying to get on the housing ladder and who are feeling the cost-of-living squeeze in so many different ways at the same time. According to PwC’s June Consumer Sentiment Survey, sentiment among 25-34-year-olds is deep in negative territory, and among 35-44-year-olds the situation is worse still.
PwC says that in the last three months these people have traded down to cheaper items, eaten out less, reduced energy consumption, gone out less, had fewer takeaways and ordered less deliveries, gone to cheaper grocery stores, driven less due to high petrol prices and postponed holidays.
It is a scandal that the generation who drive our public services as key workers; who make our cities thrive; who are at the heart of creative industries and who, worst of all, are poorly paid, have little job security and massive student debt – are being punished with a double whammy of inflation and the inability to buy a home.
Meanwhile Conservative PM’s have launched two failed first-time buyer initiatives (David Cameron’s Starter Home initiative and Boris Johnson’s First Homes have all essentially bitten the dust).
So, what can be done to help this generation get on the housing ladder?
First, The Treasury needs to pursue mortgage reform to assist the banks in providing first-time buyers with long-term fixed rate mortgages at up to 95% loan-to-value ratios. If first-time buyers are given, say, 30 years to repay their mortgages they will be able to ride out property cycles without being forced to sell at a loss. They do all of this so much better in France and Germany where these long-term starter mortgages are just normal.
The Government should also consider relaunching Help-to-Buy as a first time buyer support mechanism before scrapping it completely. This has been one of the few innovative and helpful policies in recent years and it would be facile to scrap it now when we are facing a 40%-50% drop in housing starts due to affordability constraints; perennial planning problems and massive inflation in the construction sector.
The government should fast track the development of small sites that can accommodate densely built blocks provided they offer generous quantities of affordable housing in return.
We need to streamline our confused range of affordable housing definitions and the fiscal consequences which relate to them: social housing; intermediate housing; genuinely affordable housing; London Living Rent housing; Discounted Market Sale housing; shared ownership homes – does anybody still have a clue what fits where and why some categories are Community Infrastructure Levy or Infrastructure Levy exempt and others are not?
Finally, we must empower local people in the development of property through `street votes’ and help them get their children to come and live nearby through offering planning breaks on small sites that are targeted at the affordable market; the truth is that NIMBYs won’t dominate planning if their own families can benefit.
The comfortable middle classes have benefited from soaring house prices for too long. As the new Housing Minister, Marcus Evans, becomes the 21st person to take the role in 25 years it is crucial that first-time buyers are supported once and for all. They have suffered long enough.
Marc Vlessing is founder and chief executive of Pocket Living.