Online estate agent Tepilo analyses the Conservative Party’s latest policies on housing, announced at their recent conference in Manchester.
Theresa May’s speech at the Conservative Party conference in Manchester will now undoubtedly be remembered for other things – the unfortunate coughing fit, the P45-waving prankster, the set mishaps – but it did actually include some crucial new policies on housing.
Here, we take a look at what they are and whether they will actually make any difference…
£2 billion boost for social housing
In a perhaps surprising move, May announced in her speech plans to build a new generation of council houses. For a while now the Tories have talked about fixing the ‘broken’ housing market by significantly upping supply.
They have promised one million new homes by 2020 – which would require 250,000 new properties to be built each year. Currently, that target is not being met, with only around 190,000 new homes being supplied.
To change that, May has promised councils and housing associations an extra £2 billion a year to build more affordable homes for rent. However, when this figure is analysed, it becomes clear that the cash injection would only be able to fund 25,000 homes for social rent by 2021 – or 5,000 homes a year.
This has led to criticism that this number is simply too small and is a mere drop in the ocean when you consider how many new homes need to be built to keep up with demand and the government’s targets.
Labour and various housing charities have said the plans will only aid a tiny portion of the approximately 1.2 million families waiting for affordable housing. The National Housing Federation, however, said the proposed 25,000 number could increase to between 50,000 and 60,000 if further investment is now encouraged from the private and public sector.
If current housebuilding trends are kept to, it’s likely to be closer to 25,000 than 50,000. Some 6,800 socially rented homes were completed in 2015/16, with a similar number expected for 2016/17.
Cash injection for Help to Buy
As we outlined in a previous blog, the government’s flagship Help to Buy scheme is to be revived with a £10 billion cash boost, which will aim to help 135,000 first-time buyers to get a foot on the property ladder.
Critics suggest the move will just serve to further inflate already inflated house prices, while supporters suggest people who otherwise wouldn’t able to afford a home are offered a shot at home ownership by the Help to Buy scheme.
The dissenting voices will continue to be loud, but the government will hope their attempts to appeal to younger voters and reverse years of falling home ownership will prove successful. The government talk about a broken housing market, but whether an expansion of Help to Buy is the way to fix the problem is much less clear-cut.
New controls for the private rented sector
In addition to the announcement of the extra £10 billion for the Help to Buy scheme and the extra £2 billion for new and affordable social housing, the Conservatives also used their conference to announce a range of new measures concerning private rented accommodation.
Plans for a wide range of new controls and regulation were put forward, although actual specifics were missing. The government insists that the Budget on November 22 will reveal more, but the new measures are set to include incentives for longer term tenancies, offering encouragement to landlords who provide rental contracts of at least 12 months.
There are also plans to regulate all letting agents, with Communities Secretary Sajid Javid saying in his speech that the government will ‘change the law so that all letting agents must register with an appropriate organisation’. As a result, letting agents would be ‘required to satisfy minimum training requirements’ and ‘comply with an industry code of conduct’.
Furthermore, all private landlords and letting agents would be required to become members of an official redress organisation. Currently, landlords are not required to sign up to ombudsman schemes, but the government will change the law to make this compulsory. It will be mandatory for every landlord to be part of a scheme, either directly or through their agent.
The possibility of a housing court has also been mooted, with Javid stating that the government will consult with the judiciary on whether a housing court would better streamline the current system. They will explore whether a new ‘housing court could improve existing court processes, reduce dependence on legal representation and encourage arbitration, with benefits for both tenants and landlords’.
Will the above measures help to fix the broken housing market? That’s far from clear-cut, and all the suggested proposals are fervently opposed by some, but Theresa May has nailed her colours firmly to the mast when it comes to housing – promising to dedicate her time in charge to fixing the housing market and making that the central tenet of her premiership. It’s a brave pledge and one she will now be expected to stick to.