"There’s no doubting that the UK housing market plays an absolute pivotal role for UK society, as does its contribution to the overall economy and the health of UK plc."
As I began writing this, my intention was to focus on the latest inflation figures and to try to understand why, what seems like on the surface a fairly substantial drop, was actually leading the markets in a direction which suggests the Bank of England may be less likely to cut Bank Base Rate (BBR) next month.
The fall in UK consumer prices to 2.3% in annual terms last month from March’s 3.2% was clearly greeted somewhat rapturously in Government circles, suggesting a return to ‘normal’ and no doubt a belief the Bank would be more likely to cut BBR than not.
However, the markets did not see it that way, perhaps because the fall was expected to be even greater – a poll of economists by Reuters suggested 2.1% - and because core inflation, which covers goods but not energy, food or tobacco, had only dipped to 3.9% from 4.2%. The Reuters poll had come out at an expectation of 3.6%.
This seemingly pushed a BBR cut further away, perhaps to August or September, but before I could even get my head around that, the rumour mill around Westminster started to crank up, and a few hours later we had a sodden Rishi Sunak standing outside Number 10 informing the country that we’d have a General Election on July 4th.
To say that events move fast in politics, would seem like a huge understatement, with this announcement taking almost everyone by surprise, given that – prior to yesterday – the big money was on a October/November poll.
So, what does this all mean for our sector? Well, certainly over the next six weeks we’re going to find out a lot more about what the major parties have planned for housing, how they intend to deliver those policies, and how they intend to pay for them.
We’ve had some inklings about what might be in the main parties’ manifestos but now we – hopefully – get to see the meat on the bone, and to be able to make a decision about which party we would like to see delivering on these.
From my perspective, there is a fundamental at play here that any party wishing to form the next Government has to address, and that is supply of new housing within both the owner-occupier space and, crucially, also with the private and social rental sectors.
These three key areas are inter-connected and I’m afraid for far too long – we are talking decades – they have effectively been considered in isolation. Indeed, as we have seen recently, they have often been pitted against each other with, for example, private landlords blamed for a lack of first-time buyers, or social housing deemed surplus to requirements and abandoned by many Councils.
That can’t continue to happen, and as a starter, it would be nice to hear a political party acknowledge this and to present a plan which seeks to develop supply levels across all three in order to meet the demand that currently far outweighs the supply available to would-be and existing owners or renters.
The ways and means by which this can be achieved will no doubt be a big question for the parties – should we be building on greenbelt land, should we allow local communities and their MPs to veto much-needed developments, how can Councils develop greater levels of housing, who should be able to buy and rent local homes, how will they be funded, will there be any new mortgage schemes to support this, will developers be stopped from land-banking, what about empty homes, or commercial to residential conversion usage, etc.
And these are just a few of the questions that are going to need to be answered, because there’s no doubting that the UK housing market plays an absolute pivotal role for UK society, as does its contribution to the overall economy and the health of UK plc.
We need a fully-functioning housing market which delivers the supply necessary to meet significant demand, but also ensures that those who can afford to, are able to purchase, or they are able to find affordable places to live within the rental sector.
It’s a big task by anyone’s estimation, and I’ve not even covered areas such as mortgage prisoners, or mortgage guarantees, or rates, or arrears/possession levels, or later life lending access, or leasehold reform, or improving the home buying and selling process – all of which continue to generate debate about how they can be supported/helped/achieved.
The next six weeks or so are likely to be fairly manic and unpredictable but, as stated, we do need our political parties and politicians to tackle these housing-related issues head-on, particularly supply.
Those who are able to do this most coherently with a positive view of what can, and needs to, be achieved in the future, are likely to benefit most at the ballot box. Let that conversation and campaign commence.
