A sheepish Conservative manifesto that misses the target

Posted: June 11, 2024 | Author: julesbirch | Filed under: Fire safety, Help to Buy, Home ownership, Homelessness, Housebuilding, Leasehold, Stamp duty | Tags: Conservatives |Leave a comment

Originally written as a column for Inside Housing

Wounded by the D Day furore and badly behind in the polls, the Conservatives have retreated to their home ownership comfort zone in their election manifesto. 

Rishi Sunak replayed their greatest hits in a Telegraph op-ed overnight and boasted in his speech at the launch that: ‘From Macmillan to Thatcher to today, it is we Conservatives who are the party of the property-owning democracy in this country.’

But he is well aware that the old tunes will be not be enough to fix the multiple housing crises that have developed over the last 14 years. Especially as his government has fallen badly short of the promises it made at the last election in 2019.

On housebuilding, the 2024 manifesto promises 1.6 million new homes over the next parliament, a number obviously designed to trump Labour’s pledge of 1.5 million.

It does not sound remotely plausible: the target set five years ago of 300,000 a year by the mid-2020s will be missed by a wide margin, starts are falling and planning permissions are at a record low. A step change on the far more modest one million homes delivered in the last parliament will be a huge ask.

Abolishing nutrient neutrality rules will help but whether it can really unlock 100,000 new homes with local consent very much remains to be seen.

Setting land aside for small builders and delivering new community infrastructure should support development too. 

Boosting development on brownfield land in the 20 largest cities could make a significant contribution alongside raising density levels in London and new quarters in Leeds, Liverpool and York. 

But the happy coincidence that ‘the right homes in the right places’ turn out to be in Labour-run urban areas highlights yet again the gap between national rhetoric about the need for new homes and local opposition to them being anywhere near them.

This is all about (my emphasis added) ‘retaining our cast-iron commitment to protect the Green Belt from uncontrolled development, while ensuring more homes get built where it makes sense, like in inner cities’.

The manifesto has next to nothing to say about social housing beyond a promise to implement UK and local connection tests in allocations that have been out to consultation.

There is a reference to ‘renewing the Affordable Homes Programme that will deliver homes of all tenures and focus on regenerating and improving housing estates’ but nothing like the 2019 manifesto’s recognition that ‘not everyone can afford their own home’.

The one saving grace is that housing association right to buy seems to have finally fallen off the Tory agenda. 

Otherwise the focus is firmly on home ownership. In his Telegraph article, Rishi Sunak boasts that the number of first-time buyers rose above 400,000 in 2021, the highest for 20 years, while neglecting to mention that it fell back below 300,000 in 2023, the lowest since 2013.

That was the year that George Osborne launched the biggest Conservative intervention in the housing market since 2010 and the manifesto promises the return of ‘a new and improved Help to Buy scheme’.

The old one, which finished in 2023, did boost housebuilding and helped 328,000 first-time buyers on to the housing ladder.

However, the evidence suggests that more than 60 per cent of those who took out loans could have afforded to buy anyway and questions about the long-term costs remain unanswered. 

The new scheme would at least be part-funded by the housebuilders who benefitted so much from the original one. 

However, the costings document attached to the manifesto suggests that it would only last for two years and only be worth £1.65 billion.

That’s a significant amount that could be put to much better use but the original Help to Buy scheme was worth £25 billion so by comparison the impact would be muted. 

Aspiring first-time buyers are also promised a permanent increase in the threshold at which they start paying stamp duty to £425,000. 

This comes with a price tag of £320 million in 2025/26 and £2.3 billion over the next five years but nothing to suggest that this would not simply be capitalised into higher house prices.

However, there is also a new idea: capital gains tax relief for private landlords who sell to existing tenants in the next two years.

It sounds worth exploring but with a total cost estimated at £40 million, it’s fairly small scale. Why not do the same for landlords who sell to local authorities or co-operatives?

Finally, there are some sheepish reminders of unfinished business from 2019. 

The Conservatives say they will ‘complete the process of leasehold reform’ that they left half-done in a truncated Leasehold and Freehold Reform Act.

There is a pledge to ‘cap ground rents at £250 a year, reducing them to a peppercorn over time’ and ‘end the misuse of forfeiture’ to the benefit of existing leaseholders.

However, there is no repeat of the 2019 promise to end the sale of all new leasehold homes (flats as well as houses) and only a vague assurance about making it ‘easier to take up commonhold’.

And, though the Conservatives pledge to ‘continue our support for leaseholders affected by historic building safety problems’ they have nothing new to offer those who have fallen through the gaps in existing protections. 

The early election meant that the 2019 pledge to end Section 21 was broken as the Renters (Reform) Bill failed to make it through the wash-up process.

It is still promised five years later in a watered-down form contingent on the delivery of court reforms first.  

Perhaps the starkest contrast with 2019 comes with action on the worst form of homelessness. 

The manifesto five years ago pledged ‘to end the blight of rough sleeping by the end of the next parliament’. Despite the success of Everyone In, the numbers have instead risen for the last two years.

The 2024 manifesto replaces that with a vague commitment to ‘continue our plans to end rough sleeping and prevent people from ending up on the streets in the first place’.

It has nothing to say about wider homelessness and the record number of children stuck in temporary accommodation or about the cuts to housing benefit that are one of the main causes of both.

Indeed, the fact that headline-grabbing tax cuts would be funded by yet more ‘welfare reform’ to cut billions from disability benefits suggests that the pressure would only increase on those left out of the Conservative comfort zone. 

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