Building a new edifice for housing policy

Until a few years ago, housing policy was the preserve of one junior minister in DCLG – a little-loved government department at the end of Victoria Street.

But, as the crisis of affordability has intensified, so the issue has surged up through the government matrix.

Today, housing sits close to the apex of public policy.

And at the Conservative conference in Birmingham, its lofty position was firmly cemented.

In the conference halls, bars and airless fringe meetings, brainy-looking people were busy constructing an ever more ambitious edifice for housing policy.

Communities Secretary, Sajid Javid, told anyone who would listen that his department would only really be judged on one thing: building homes.

Amid great fanfare a new £3 billion Home Building Fund was unveiled, with the promise of a further White Paper later this year.

But this was not just about a response to what’s widely seen as the pitiful housebuilding record over the past decade.

The links between housing and a broad range of other policies were being made with increasing confidence. For instance:

  • Housing and pensions: some strikingly punchy views were aired at one fringe that rooted the pensions crisis firmly in the housing market. Young people are paying far too much in rent to afford proper pensions.
  • Housing and monetary policy: from the policy professors on the side-lines right up to Theresa May herself, there were loud criticisms of extreme monetary policy (QE) in flooding markets with cash and over-inflating asset prices.
  • Housing and energy: amid increasing fears about the capacity of UK electricity generation to meet future needs, more efficient use of energy in homes was being described as an increasingly important way to square the circle.
  • Housing and business: the big housebuilders were hammered at one event for presiding over a conspiracy with the banks and lenders to keep house prices high and the level of actual building constrained. 

Successful housing policy suddenly seems like the mortar holding quite a bit of Theresa May’s domestic agenda together.

There’s one important reason for this: Brexit.

Housing policy is one of the few standout areas that is not particularly dependent on the horrible complexity and uncertainty of the exit saga. Assuming the army of skilled European builders will be allowed to stay in the UK.

But amid all of the consensus on the need for action, there are some notes of caution too.

In the past, politicians on both sides have often pulled housing policy levers in Whitehall with little or no effect in communities around the country.

Grant Shapps was perhaps the most hyperactive housing minister of recent times. He will probably claim some success. But if the UK had a thousand homes for every press release he issued, the problem would have been solved years ago…

Under Labour, ministers had favoured a ‘top-down’ approach – central government commanding areas to build homes. The coalition instead pursued a ‘bottom up’ strategy – incentivising councils and housing associations to encourage building locally. Now, the government seems to be flipping back to ‘top down’ policy.

There’s also a yawning time gap between central government decisions and real homes actually going up. In some instances it can still be years between planning permissions being approved and the keys being handed over.

Even if the schemes now being discussed are effective, the results of the current housing flurry may not be seen for five or even 10 years.

And by then, even some of the riddles of Brexit may have been answered.