Conservative Conference 2015: What It Means for Prospective Homeowners
The political conference season is over, and the Conservative party put housing and infrastructure as perhaps the central issue at their conference in Manchester. While the Conservatives have been in power before through a coalition with the Lib Dems, this was the first time the Tories have held government on a full public mandate.
So what does their first party conference with a full ruling mandate mean for potential house buyers in Britain?
According to David Cameron, “There’s one big piece of unfinished business in our economy: housing reforms.” In his speech to party conference, he spoke of a “national crusade” to deliver more homes. The Tories being Tories, this means a drive towards larger numbers of home ownership, something the party has always championed, but made a real core tenant to their ideology during the Thatcher years of the 80s.
Construction, Construction, Construction
One of the first announcements at conference came from George Osborne, who told the gathering that they would be implementing a national Infrastructure Commission lead by the Labour party’s Lord Adonis – demonstrating a certain degree of bipartisanship.
The role of the commission will be to give strategic direction to Britain’s future housing and infrastructure projects. It will do this by suggesting potential funds, investment and the time frames for the different ideas, allowing the Government the scope to pick and choose the things they like at any given time.
Osborne appears to be in favour of a construction-led recovery of the housing sector, allowing his role as a ‘builder’ (*prepares images of Osborne in hard hat and orange overalls*) to flourish.
Extending Right to Buy
The Conservatives also recommitted to extending Right to Buy to housing association tenants. While home ownership has always been a central Tory idea, the extension plans come at a time when the Government is under fire for not providing enough affordable housing for the private rental sector. However, with ‘generation rent’ set to continue as a suitable label for the current crop of first-time buyers, many suggest that the Government should at least be seen as acting on the issue of private rents.
The party’s strategic move away from council housing and private rental also comes at a time where David Cameron as vowed to devote much of his time in office to “an all-out assault on poverty.” However, with the average asking price of the Government’s new starter homes at £450,000 in London, it’s unlikely that many people who earn lower than £70,000 will be able to afford them.
Wider Economic Forces
When questioned about this lack of truly affordable housing and their lack of a real, fast-term solution to the severe lack of housing stock, the Tories suggested that their housing plans are strongly linked to the broader economic picture.
While £450,000 is a lot for a so-called starter home, that figure would reduce if there were more homes as a result of a more rapidly growing economy. What this shows is that the Conservatives’ plan for housing is dependent on the overall state of the country, and while Britain’s economy is growing stronger than other European nations (whether that’s because of, or in-spite of!) growth isn’t as rapid as it could be.
So what are the solutions for prospective buyers? While the Government is trying to increase the affordability of buying your own home, it is still a real problem for generation rent. One solution could be to take out a 5% deposit mortgage for first-time buyers. A second option open to those looking to invest in a second property or move from their existing one could be to take out a bridging loan to help cover fees. While it’s certainly not the answer to everybody’s problems, it’s at least somewhat of a start.