Housing crisis? What housing crisis?

The housing minister for England gave his first TV interview yesterday. I think it would be fair to say it did not go too well.

A week ago Kris Hopkins was ‘not available’ to appear on Channel 4 News to debate homelessness and house prices. This week the news peg was a 40 per cent increase in mortgage approvals and a 10 per cent increase in asking prices in London in a single month. He was interviewed as part of a package that asked ‘Is the housing market overheating?’

Interviewer Jon Snow presented him with four ‘key stats’ on completions (up slightly but still down by a third on the pre-crisis peak), house prices (up 5 per cent in a year), foreign home buyers (responsible for half of sales over £1 million in London) and the gap between prices in the north and south (up from £66,000 to £103,000 in the last year).

Here’s how it went with a few comments from me along the way.

So, asked Jon Snow, are you worried?

Hopkins: ‘Well I’d just like to correct one of the facts you’ve put out there. We’ve seen, we’ve recorded house price increases of 3.8 per cent across the whole country if you incorporate the London and the South East figures. But actually if you take London and the South East out we’ve only seen prices increase by 2.1 per cent and in fact in significant parts of the country they have either stagnated or they’ve still declined.’

Snow: But you can’t write off London and the South East when there are millions of people living in this area and they’ve gone up 10 per cent in a month.

Hopkins: I don’t think you should write them off. But I think you shouldn’t write off the 60 million people who don’t live in London as well. What I would say to you is you’re right, we take this very seriously, we’re coming from a very low base, we’ve delivered 33,000 this year. We’ve actually delivered 150,000 affordable homes across the country…’

Cue a list of the usual stats that any minister would trot out at this point. In fairness, it should be pointed out the 10 per cent increase was in asking prices not actual prices and the 33,000 completions was in the April to June quarter of this year. It’s also true, as ministers from George Osborne down have pointed out, that there is a big difference between London and the north of England in terms of house prices.

However, London is home to 7.8 million people and the South East 8.5 million. The population of the rest of England is not 60 million but 37.5 million. And the housing market influence of the market in the capital now extends to most of southern England. As research by Shelter this week shows, the problem is that prices are already at unaffordable levels in most of the country and two out of three voters oppose rising prices.

Back to the interview.

Snow: Are you worried about that statistic about foreigners coming in and buying?

Hopkins: No, I think one of the key things we need to do in this market is… We’ve just come out of the deepest recession since the 1920s and what we’re now seeing is people wanting to come and invest in this country and want to add to our infrastructure and a key part of our economy and our housing provision can come from that sector as well.

Snow: If you and I wanted to go and buy a house in Hong Kong, Singapore and parts of Malaysia we’d have to pay special duties on foreign buyers. What’s wrong with doing that here? It’s 15 per cent in those countries.

Hopkins: Well I don’t want to live in a country where we actually start increasing taxes on that basis.

Snow: But we’ve got a crisis minister. We actually have a housing crisis. An enormous number of people do not have the capacity either to rent or buy at these rates.

Hopkins: Well I think there’s two things… I don’t know about a crisis because I’ve said before let’s look at Britain overall and there is a completely different picture in different parts of the country. But if I can suggest to you, in fact I can tell you, that we’ve spent, we’ve allocated £19.5 billion from public and private sector to build affordable housing alone, we’ve given powers to the Mayor of London and significant millions to make choices at a local level about that provision.

That view of foreign home buyers as investors who are good for the economy rather than speculators who drive up prices will not be shared by many people. However, it is in line with the controversial view he expressed over the weekend that second home owners bring ‘huge benefits’ to rural communities. Hopkins does have the support of Boris Johnson on both even though they risk seeming more on the side of  foreign buyers and second home owners than people struggling to rent or buy their first home.

But  ‘I don’t know about a crisis’? As James Callaghan famously found out in 1979, you don’t actually have to use the words ‘Crisis? What crisis?’ to give an impression of complacency. It may be true that there are parts of the country where prices are stagnant are falling and where homes are still affordable, but try telling that to anyone looking to buy or rent in London and the South East and many places beyond. Or to people struggling to pay the rent because of welfare reform or languishing in bed and breakfast. Or indeed anyone who has watched Faisal Islam’s coverage of the housing market on Channel 4 News over the last few weeks.

The interview continued:

Snow: But in a curious way minister that has not made the market work. There is a desperate shortage of housing, an enormous number of people who want to buy and an enormous number who can’t afford to.

Hopkins: Well I think that point you make about access to funding and making that work is really important and that’s why we’ve put together a Help to Buy scheme which enables individuals to buy who don’t have the ability to raise a deposit. We can help facilitate that, if they’ve got up to 5 per cent deposit we can help on that as well, which is about increasing the number of transactions, which is about making sure that we’re addressing that issue. But the fundamental point that you’re talking about is supply which is about, for us, getting houses built.’

And thankfully that is where time ran out at the end of the programme. I was left feeling almost sorry for the minister at the end of it. He was struggling to answer questions about a situation for which he holds the brief but no control or power. Where Grant Shapps could once (quite rightly) call for a long period of stable house prices, George Osborne has now decided to use Help to Buy to engineer a house price boom and reap the economic and political benefits ahead of the election regardless of the long-term consequences.

All any housing minister can do is defend the policy and squirm in interviews. But that’s no excuse for seeming to be so out of touch with the housing crisis that so many people perceive is already happening around them.