As we prepare ourselves for next year's General Election, the UK's intractable house-building problem really should be amongst the key campaigning issues. In terms of hard numbers, Labour's target of 200,000 new homes a year by 2020 is topped by the Liberal Democrats' target of 300,000. The Conservatives have not set an overall figure, but they have pledged to deliver 100,000 new starter homes if they secure another term in office. Ricardo Gomez writes.
All three main parties have also signalled commitment to the need for large scale new housing development in the form of garden cities and new towns. Although in practice the scale of recent proposals are a far cry from the original idea of garden cities. In addition, there is recognition that the public sector has to play a bigger role in house-building, both through the direct commissioning of housing and through a more effective and efficient planning system.
Previous elections have seen housing slip down the agenda in the run up to polling day and it did not feature much at all in the 2010 leaders' debates. However, with every likelihood of a close finish in May 2015, politicians on the campaign trail should not overlook an issue which is inextricably bound up with voters' sense of economic well-being. Post-recession wages are failing to keep pace with housing cost inflation. So a significant part of the electorate will enter 2015 feeling unconfident about prospects for home ownership. Many of the North West's younger voters do not face the exorbitant housing costs of London, but the difficulties they have finding their own home impacts all generations. These are very real for the families of the thousands of young adults living with parents who cannot yet afford to set out on their own.
We might also see a tangible impact of the housing crisis on election day itself. Rising private rents and distant prospects of home ownership mean renters could be a force to be reckoned with in some marginal constituencies. Research for the Generation Rent campaign group has pointed to 86 marginal seats, including 11 in the North West, where private renters with no political allegiance could in theory swing a seat.
What can we expect post-election? The housing problem will remain politically charged if, as some predict, late 2015 sees the first interest rate rises since 2009. As the Governor of the Bank of England has already warned, further rises in housing costs and the continued problem of household debt risk tipping the economy back into recession.
Will this pressure translate into solutions? There are no quick fixes for a problem which requires significant private and public investment over many years, and those already owning their own houses may not be overly concerned. Yet with constraints on public finances set to be maintained, large scale new public investment in housing seems unlikely in the next Parliament. Improvements to the planning system which increase the supply of housing land will help significantly, and many developers would probably welcome further support to house buyers. But it will only be when the cries of those seeking more and cheaper housing outweigh the pressure to resist development that the political will to grasp the housing nettle will happen.
Dr Ricardo Gomez is director of economic consultancy Regeneris