People should do nothing but welcome many aspects of the government’s much-leaked, much-previewed and much-vaunted bid to resuscitate the housing market, to be announced this week (see here).
Freeing up unused public sector land, and creating a stimulus for young people to borrow realistic mortgages and thus become first time purchasers, are two particularly notable initiatives which should genuinely help increase building volumes and buyer numbers.
But one question is unanswered: what kind of homes will be constructed as a result of this windfall of building sites and buyer mortgages? The new sites are likely to be offered to developers at low or no cost, so in theory at least there appears no reason why they could not be used to host a high volume of affordable housing - it would be a genuine disaster if they were instead used for more of the same old expensive ‘new homes’ as before.
TrinityMirror’s Smart New Homes price index - a flakey affair, but one of the few guides to new homes prices that exists - shows that in every region of the country, the average price of a new home is far above the average price of an older home. The cheapest area (according to the latest issue of the index, released back in August) was Wales on £173,000; the dearest area was Greater London on £315,721.
Both are ludicrously out of reach of many first time buyers, even with the help of their parents or with two incomes in a household.
Surely when it comes to any new homes to be built on public land supplied at low, sub-market cost the old ‘affordable housing’ proviso should be reversed - in other words, the significant majority of new homes built on that land should be genuinely low cost, with only a small minority valued at market cost. That would provide a real dividend for the general public and in particular those who look like they face a generation of renting, not owning.
The likelihood of this happening appears low, for two reasons.
Firstly the measures to be announced this week also look likely to include still more right-to-buy discounts so that what relatively little social council housing that remains, will finally be sold off.
Secondly, it is worth remembering what the Daily Telegraph revealed a few weeks ago - that developers and at least one part of the coalition government are closely allied to each other.
Does this suggest that Downing Street may be reluctant to do anything to seriously dent the potential income of its friends in the boardrooms of the volume housebuilders? If so it would be a lost opportunity, and mean that instead of being the people who breathed new life into the market Cameron, Pickles and Shapps instead would go down in history as those who gave away more of the family silver to their allies, with nothing much for first time buyers in return.
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