I wrote here a few weeks ago that the worst policy announcement of this truly rubbish election campaign was the Tories’ stunningly stupid plan to extend Right to Buy to the residents of all housing associations.
It’s unfair, it would be expensive, and, given that housing associations are private organisations, the very mention of forced sales has nasty hints of the infringement of property rights (the thing that capitalism hinges on).
But the competition for the worst policy is hotting up. And it is all about the housing market.
Yesterday, Ed Miliband announced that he, too, was going to have a go at chipping away at property rights. In an almost SNP-like ‘land reform’ announcement, he said that Labour would allow councils to confiscate idle land from developers and redistribute it to other developers. Nice.
He also announced some ill-thought-through rent-control plans. John Stepek has looked at all this stupidity in Money Morning, but it is worth noting again just how silly it is all getting.
All the parties are now crazy to win votes with the housing problem: 80% of people think there is a “housing crisis” and 16% that housing affordability is a “crucial issue” – that’s the highest percentage since 2007.
They are all chucking other people’s money at buyers, with cuts to stamp duty for first-time buyers (the ONS said of the cut in stamp duty in the last Budget: “a one percentage point change in the average stamp duty land tax rate leading to a 1.4% change in the house price”), plus schemes such as Help to Buy, Rent to Own, Right to Buy, rent controls, housing Isas, no inheritance tax for family homes, the capital-gains tax exemption on primary homes to stay, etc.
At the same time, they are all promising that they will raise supply in some as yet undetermined way. Sadly, as has been the case for many decades now, all they are really doing is the former.
There are no promises of radical changes to planning policy, just, as the FT puts, it “ambitious targets to build thousands more homes than the norm without coming clean about how to achieve this”. Note that a mere 10% of the UK is classified as ‘urban’ and that I am writing this on the train from Edinburgh to London, a journey that astonishes me every week with its sheer greenness.
Current policy is not about solving the problem of high-priced homes in the UK. It is about winning short-term votes by exacerbating it for the long term (keeping interest rates as low as possible and shovelling money to buyers, both things that push prices up, keep them up and then push them up some more). That’s nasty, to say nothing of being really bad for our economy – super-high house prices and the leverage they come with can be blamed for everything from wealth inequality to our failure to invest in innovative businesses.
A letter from Andrew McNally to the FT today references Keith Joseph’s view on the ‘Barber boom’ of the 1970s. He called it a “cruel deception on those whom it is designed to help.” The same is true of modern housing policy – from all the parties.