Jacob Rees-Mogg’s Innovative Housing Crisis Solution

Jacob Rees-Mogg has co-authored a paper for the Institute of Economic Affairs along with top wonk Radomir Tylecote on how to use freedom-based solutions to tackle the housing crisis. The package of solutions include cutting stamp duty, permitted development rights for individual streets, and importantly selectively re-classifying some ‘green belt’ designated land that achieves none of its official purposes. Harder for Tory grassroots to dismiss this when even Jacob Rees-Mogg is saying nimbyism has gone too far…

‘Green belt’ land includes large areas of scrubland and even brownfield sites. Building on just 3.9% of London’s green belt near railway stations would provide one million well connected new homes – replacing parts of the green belt that are not green or pleasant at all. This is a policy that would help fix one of the biggest problems facing Britain today, and it wouldn’t cost a thing…

UK Experiencing Worst Decade for Housebuilding On Record

The Tories are telling the truth that house building is at its highest in a decade, unfortunately that spin doesn’t tell the whole story. The Centre for Policy Studies has revealed that despite a recent uptick, this decade is set to see house-building in England at the lowest level of any decade since the Second World War. It’s not good enough to get back to where we were year-on-year, more needs to be done to make up for a decade of lost growth…

In the 1960s, new building in England reached the equivalent of one home for every 14 people. By the 2010s, that ratio has collapsed to one home for every 43 people.

Director of the CPS, Robert Colvile described the building of fewer homes as “part of a pattern stretching back half a century.” The CPS called on Ministers to “take bold action in 2019 to ensure that the 2020s become the decade in which we break this hugely damaging cycle.” They’re right, it is also an electoral imperative for the Tories…

CPS Claim ‘Cost-Neutral’ Policy Will Create One Million Homeowners

The Centre for Policy Studies has come up with a novel proposal which they say could see one million more people become homeowners in one year. ‘Help to Own’ aims to make it easier for ‘Generation Rent’ to buy while also incentivising landlords to sell to their tenants by introducing a scheme for a single year that would pool capital gains tax receipts on the sale of rented homes in order to then grant them back as rebates to landlords and tenants.

33% of each rebate would go to the landlord while 66% would go towards the deposit of the purchasing tenant. The CPS have crunched the numbers and say the net effect would be to increase revenue to the Treasury, while the tenant would only need to stump up the cash for 3.33% of the property upfront, with the capital gains rebate making up the rest of the 10% deposit they need to get on the property ladder. Like ‘Right to Buy’, ‘Help to Own’ could be a game changer in granting people a tangible stake in the economy, all at no extra cost to taxpayers…

“Ending Austerity” & Building Council Homes

Since the Tories came into government the national debt has risen by over 70%. By any measure that is hardly evidence of the savage austerity of left-wing rhetoric.  Britain is still running a deficit, in 2018/19, taxpayers will fund interest payments of some £53 billion. A billion-a-week to service the national debt, you can put that on the side of three red buses.

Spreadsheet Phil is getting nearer to finally closing the deficit that George Osborne promised to close by 2015. This should not be taken by spending ministers as a signal to up spending, the national debt still has to be serviced and it would be prudent to start paying down the debt. Likewise giving councils carte blanche to borrow to finance an extended council house building programme will add to the debt burden. If that is what Theresa May is signalling in her conference speech it is bad politics for the Tories.

In Asia it is not uncommon for the state to build low cost housing for sale at below market rates. If councils were encouraged to build and sell properties they would not end up on the state’s balance sheet. It would spread capital ownership more widely by allowing people to own their own homes. It is good politics because property-owning democracies don’t tend to elect socialist governments…

By all means encourage councils to actively build new developments on their land. Scrapping the government cap on how much they can borrow to fund new developments should not however be a licence to build another generation of council estates – the petri dish for municipal socialism. The government should insist that the low cost homes should be offered on construction to qualified buyers who would have to be owner occupiers.  When Phil Hammond announces the budget at the end of the month it would be good if the removal of the cap was coupled with a new “right to buy” that granted local residents the right buy any new council homes built. Councils would be obligated to offer new build homes for sale without the high profit margins often commanded by private sector developers. Politically it is a winner and the Treasury would be happy that long-term it would pay down the government debt used to fund the construction.

Housebuilding Going Off a Cliff?

Worrying data from the CIPS showing a sharp drop in purchasing managers’ confidence in the residential construction category. Suggests a lack of confidence in the government’s ability to make housebuilding its main domestic mission…

Actual 2017 housing starts are at a ten-year high, with the National House-Building Council expecting housing starts to rise further in 2018. Anecdotal evidence from industry sources suggests foreign construction workers are becoming scarce as returning growth in Europe attracts them to return home. Labour supply may well be a limiting factor for housebuilders…

H/T @rupert_seggins, @GeorgeTrefgarne

OBR: Hammond’s Budget Rabbit Will Increase House Prices 0.3%

Hammond’s abolition of stamp duty for first time buyers might be a tax cut, but it doesn’t go anything like as far as the Institute of Economic Affairs, Adam Smith Institute and Taxpayers’ Alliance were hoping (they wanted it abolished for everyone). This line from the OBR is a tough one for the government to explain: the policy will increase house prices by 0.3%.

Given the OBR’s forecasting accuracy this is a rounding error that is less than the cash value of the stamp duty cut…

Hammond Re-Announces Existing Tory Housing Policy

Philip Hammond says housing is the “number one priority” for his Budget, well he’d better hope he’s got more in his locker than what was pre-briefed to the Sundays. The top line announcement of 300,000 new homes a year is already Tory policy – just last month Sajid Javid was using the same number. Not only is Hammond’s ‘new’ target not new, it is also entirely underwhelming. Last year 217,000 houses were built and that didn’t make a dent in the housing crisis. A meagre increase of a quarter is nowhere near what Tory MPs have been asking for. Saj reckons they need to spend £50 billion to make a difference, Hammond is offering just £5 billion.

The verdict from the experts is damning – the Times‘ property correspondent says “even for current government’s standards, this has to be the weakest set of measures to fix the housing crisis seen in a long time”. The Chancellor’s other damp proposal to launch an inquiry into landbanking is classic Hammond and already has industry figures groaning. Meanwhile the think tanks are tearing their hair out, with the Institute of Economic Affairs bemoaning his refusal to countenance building on the green belt and the Adam Smith Institute arguing stamp duty should be abolished. Last week the government were promising us “real action” on housing and a Churchillian effort from Hammond to get Britain building. He needs something much bigger than this on Wednesday…

Tory MPs and Think Tanks Pan May Announcements

Conference has barely begun and Tory MPs and right-leaning think tanks and pundits are already kicking off about Theresa May’s announcements on tuition fees and Help to Buy.

Kate Andrews of the Institute of Economic Affairs:

“The Prime Minister is right to address the plights of young people leading up to Conservative Party Conference, but pledging over £10billion worth of uncosted policies will only burden them more down the road, as they face an increasing national debt and – inevitably – higher taxes. While May plans to temporarily put a bit more cash back in the pockets of young graduates, the party must acknowledge that the current university funding system – and lack of competition within it – needs a complete overhaul if student debt is to be tackled. Propping up the Help to Buy scheme only distorts the housing market more, which is already in a perpetual state of crisis. If May is serious about getting young people on the housing ladder, the answer is clear: liberalise the housing market and build more homes.”

Sam Bowman of the Adam Smith Institute:

“Reviving Help to Buy is like throwing petrol onto a bonfire. The property market is totally dysfunctional because supply is so tightly constrained by planning rules, and adding more demand without improving the supply of houses is just going to raise house prices and make homes more unaffordable for people who don’t qualify for the Help to Buy subsidy… Reviving Help to Buy is an astonishingly ill-judged move that may prove economically and politically disastrous for the government.”

The view from ConHome and Unherd:

MPs Guido has spoken to are wondering why May has chosen to engage on Corbyn’s territory with policies that are just Labour-lite. Colleagues are asking why there are no ambitious announcements on house-building and student debt rather than this damp squib. Not to mention the £12 billion of unfunded spending. A lot of work to do on policy over the next few days…

UPDATE: The government’s side of the story articulated well by James Cleverly:

Minister Slammed Letting Fees Ban Just 8 Weeks Ago

The big Autumn statement announcement pre-briefed to today’s papers is that the government is banning letting fees. This is yet another u-turn by Theresa May – just 8 weeks ago her housing minister Gavin Barwell publicly dismissed the proposal as a “bad idea”. Such a bad idea that May herself voted against it in 2014, and the Tories voted the same policy down again in 2013. Kate Andrews from the Institute for Economic Affairs says:

“The Chancellor can come in and not have to commit any of his own spending to do something that seems like it’s trying to help those who are just managing. But of course this is him skirting around the issue of the housing crisis altogether… Politicians will implement the dumbest policies to avoid actually addressing the issue.”

As the National Landlords Association explains, tenants will still foot the bill:

“Philip Hammond lacks any understanding of how the sector works. Agents will have no other option than to shift the fees on to landlords, but adding to landlords’ costs will only push more towards increasing rents.”

Yet another Miliband policy gimmick pinched from Labour’s 2015 manifesto. The politics make sense, the papers have written it up kindly, but even the minister knows the policy is a dud.

UPDATE: Barwell speaks:

“It is the nature of the job that you have to defend current policy even when you’re working to change it.”

Zoopla CEO Behind Mishcon De Reya Anti-Brexit Legal Action

ALEX CHESTERMAN

City law firm Mishcon de Reya are launching a legal challenge to Brexit with the backing of a number of businesses who for some reason haven’t been named publicly. Guido can reveal one of the CEOs behind the action is CEO of the property website Zoopla. In an email to other businesses, CEO Alex Chesterman claimed:

“If the correct constitutional process is not followed then the notice to withdraw from the EU would be unlawful and open to legal challenge…

With this in mind, Mishcon de Reya, on behalf of a number of clients have commenced a legal process to ensure the UK Government will not trigger the procedure for withdrawal from the EU without parliamentary approval and have, subsequent to his article, retained Lord Pannick QC to act as counsel in this action. These steps seek to ensure that any Article 50 notification process is lawful.

I strongly encourage you to support this important issue. We want to ensure that this once-in-a-generation issue is handled properly under UK law with the correct constitutional process applied to an irreversible decision of this magnitude.

Please can I ask you to action as follows below:
 
1. Email Mishcon to lend your support/name to this process
2. Please use the hashtag: #mpstodecide and share/tweet the link to the Mishcon press release
3. Use this email as a basis to send your own version to your network to encourage wider support

If the referendum had been decided by FPTP, Leave would have won 440 seats to Remain’s 220. Good luck…

Cherie Blair: “Big Government is Doing Things to us Which are Unfair”

Cherie Blair, whose husband Tony created almost one new law for every day in office, railed against “big government” while supporting landlords in their judicial review of recent buy-to-let changes.

“United together, we can challenge the big government that is doing things to us which are unfair… I have a secret passion for homes under the hammer. And you know, time after time you see them interviewing people on that programme, and they are ordinary, decent people who have a little bit of money and have decided to try and use that wisely to provide for themselves and their families. I would have thought they were just the sort of people that a Conservative government would want to support”

Savour the buy-to-let landlord Cherie Blair bashing big government while lauding the Conservatives for naturally supporting “ordinary, decent people”This would never have happened under Maggie, or Tony for that matter…

Watson’s Dodgy Flat Mate

watson hackett
Another member of Team Watson has become embroiled in scandal, with Sandwell Councillor Simon Hackett being investigated over allegations he got the council to buy back his mum’s house. More recently, Hackett’s alleged to have been given a fixed penalty notice for an incident of indecent exposure in March. Awkward for Watson who has had a high profile as the Nonce Catcher General

The closeness of Watson and Hackett appears to be rather embarrassing for Labour’s number two. One local blogger alleges that the bent councillor and Watson were flatmates in 2012, sharing an address on the electoral roll, while a co-conspirator claims Hackett was Watson’s very own election agent. Watson’s storied history of dodgy housing and crooked mates continues…

Greg Clark Denies U-Turn on ‘Right to Buy’ Manifesto Promise

Communities Secretary Greg Clark appeared to have quietly backed down to housing associations on “Right to Buy”. Furious Housing Association fat cats were opposing giving tenants the chance to own their own homes because they argued they were being forced to sell their assets at a discount. Following negotiations and heavy lobbying over the summer, Clark has this afternoon said he is considering their new offer to ‘voluntarily’ introduce the extension, ensuring market rate sales with discounts to tenants subsidised by the government. This looks like a complete cave in and effectively a U-turn on a manifesto promise. 

 “We will extend the Right to Buy to tenants in Housing Associations… It is unfair that they should miss out on a right enjoyed by tenants in local authority homes.” Conservative Manifesto 2015

Guido isn’t quite sure how it could be described otherwise. If landlords only have to sell to tenants on a voluntary basis, tenants won’t have a ‘right’ to buy, landlords will have an “Option to Sell”, just as they do currently…

UPDATE: DCLG sources get in touch to insist there is no U-turn, that the proposal from the Housing Associations will have to “absolutely ensure a right-to-buy”. They were unable to confirm whether or not legislation would be required.  When Guido asked if the proposal seen today matched the right to buy commitment in the manifesto he was told “We haven’t read it”.

UPDATE II: Greg Clark calls to tell Guido forthrightly “If they [housing associations] want to extend the right to buy to more people that is all well and good.  My bottom line is that their proposal must match up to the ‘Right to Buy’ manifesto commitment and if they want to do it voluntarily they can start implementing it right away. There will be no compromise on introducing ‘Right to Buy’.” 

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