Housing in the Tory leadership contest

Originally posted as a blog for Inside Housing on June 19 – updated June 21. 

Beneath the surface of a Conservative leadership battle dominated by Brexit and Boris Johnson there is a battle of ideas about the future direction of Conservative housing policy.

Put at its simplest, the battle is about whether to continue in the pragmatic direction signalled by Theresa May since 2016 or go back to the more ideological one taken by David Cameron before then.

But scratch a little deeper there are more fundamental debates going on about how far to go in fixing a housing market that most Tories agree has turned into an electoral liability for them.

Key questions such as how far the government should go in borrowing to invest in new homes and intervening in the private rented sector and the land market are back on the Conservative agenda.

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The day after

So it turns out that the winners in the ‘the housing election’ are upmarket estate agents and housebuilders.

The soaring share prices of firms like Berkeley Homes and Foxtons this morning may be as much about Labour defeat as Conservative victory. Take the mansion tax and moves against non-doms out of the equation and prices of expensive London homes are set to go on rising along with the profits of the firms that trade in them.

The mood could hardly be more different in a housing sector facing up to an unexpected Conservative overall majority that changes all the pre-election calculations about the right to buy (it won’t happen under a coalition) and huge cuts in social security (another party will block them).

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Taking the pledge

The optimist in me hopes that Ed Miliband’s launch of Labour’s independent housing commission marks the start of a political arms race on housing ahead of the next election.

In this scenario, his target of 200,000 homes a year by 2020 and eye-catching policies to achieve it will strengthen the hand of the pro-development wing of the Conservative Party and mean that whoever wins the next election will have a serious crack at tackling the supply crisis.

The pessimist in me worries that I’ve seen little so far that suggests the target is achievable (see Colin Wiles on this last week) and that the two policies that have made the headlines won’t work except in the sense of strengthening the hand of the Tory nimbys.

Read the rest of this post on Inside Edge, my blog for Inside Housing