UK Economics

STEPHEN GLOVER: Mass migration, the betrayal of a generation and how we CAN solve the housing crisis

When Theresa May stood outside No 10 Downing Street as our new Prime Minister on July 13, she referred to the ‘injustice’ that ‘if you’re young you’ll find it harder than ever to own your own home’.

One can hardly imagine David Cameron or George Osborne — or indeed Jeremy Corbyn — emphasising in such an important speech the virtual impossibility of home-ownership experienced by many young people.

For millions of them there is no prospect other than paying rent to a private landlord or housing association for as far ahead as the eye can see. Expectations taken for granted by their parents and grandparents have been shattered.

According to a report by the Resolution Foundation — which really only tells us what we already knew — the proportion of home-owners compared with those who rent has been plummeting, notably in big cities such as London. Even in Manchester, not normally regarded as a property hot-spot, it fell from 72 per cent in 2003 to 58 per cent this year.

When Theresa May stood outside No 10 as our new Prime Minister, she referred to the ‘injustice’ that ‘if you’re young you’ll find it harder than ever to own your own home'

Theresa May talks about ‘union of all citizens’ in first PM speech

The reasons for the current state of affairs are complex. They include near-stagnant wages in recent years, more onerous mortgage requirements and, above all, a shortage of adequate new housing, which is attributable to a wide range of factors, not least uncontrolled immigration.

I’d say that this crisis of declining home-ownership is one of the most serious issues Mrs May faces — more serious than Trident renewal or whether or not we should build new nuclear power stations with French and Chinese money and know-how.

For the issue of home-ownership is fundamental to Tory philosophy. In the Twenties, a now mostly forgotten Conservative politician called Noel Skelton coined the phrase ‘property-owning democracy’.

He meant that people need to have a stake in modern society if they are not to feel alienated or left behind. It was an idea taken up with enthusiasm by the Tory-dominated National Government of the Thirties.

It encouraged the private sector to build hundreds of thousands of new houses — 280,000 of them in 1935-36 alone. The countless rows of neo-Tudor villas on the outskirts of most of our large towns are the happy harvest of those years.

After the war, first Labour and then Tory governments boosted house-building to even greater heights, though the majority of these new homes were council houses. More than 300,000 houses a year were put up in the early Fifties when Harold Macmillan was housing minister.

Compare all this with what has happened in recent times under Labour, the Coalition and now the Tories. The number of new houses has crept up from just above 137,000 in 2010 to not much above 150,000 last year.

Given that most experts reckon we should be building between 200,000 and 250,000 new houses a year, this was a disappointing, even pitiful, performance. Mr Cameron and Mr Osborne seemed to have grasped the magnitude of the problem, and came up with schemes for first-time buyers such as Help to Buy (which allowed some young people to purchase a home with just a 5 per cent deposit).

David Cameron George Osborne

Explained: Why you can’t afford to buy a home in the UK

But although these policies may have made a difference at the margins, they did little to address the central difficulty, which is that, despite a modest relaxation of planning regulations and a more buoyant economy, far too few houses are being built.

What must Mrs May do if she is to avoid repeating the mistakes of her predecessors, and dashing the hopes of young people which she will have raised in her speech outside No 10?

The first measure is obviously to bring immigration under control, which is now doable as a result of the referendum. Last year, net immigration was 330,000, which equates to a city the size of Nottingham, plus some. That’s an awful lot of new homes.

For more than a decade, politicians have either deliberately encouraged mass immigration (Labour) or failed to stem it (the Coalition and the Tories). It beggars belief that this should have gone on while there was no commensurate attempt to enlarge the housing stock, or construct enough new schools and hospitals.

One recent official projection suggested that 210,000 new households will be required every year until 2039. That assumes that net immigration will be running at 170,000 a year (about half of the current total), in which case it would account for 37 per cent of new housing demand.

However, the admirable Lord Green of the invariably reliable MigrationWatch UK has postulated an annual net migration figure of 233,000 during this period on the basis of what has happened over the past ten years. In that case, immigration would account for 45 per cent of new homes over the coming years.

It follows that unless we succeed in getting down net migration to the ‘tens of thousands’ (a pledge Mrs May has reiterated since becoming Prime Minister), immigration will necessitate millions of new homes over the next few decades.

Let us imagine — quite a stretch, I agree — that as a result of leaving the EU we do, in fact, manage to reduce migration figures significantly. In that case, a good deal of the pressure for new housing would disappear.

May must bring immigration under control, which is now doable as a result of the referendum (pictured, migrants at the Calais Jungle camp

But, of course, there would still be other impediments. Obtaining planning permission is still a fraught and often lengthy process. Like so many others who love the British countryside, I am loath to suggest that planning regulations should be relaxed, but it can’t be denied that something must be done.

A partial solution would be to force public and other bodies such as Network Rail to free up more ‘brownfield’ sites for building. According to one estimate, such sites could accommodate a million new homes. The best way to make owners release this land would be to impose a tax on dormant brownfield sites capable of being developed.

There is, in fact, plenty of evidence that house-builders and developers are sitting on land which has already been given the go-ahead for building. Earlier this year, the Local Government Association claimed that 475,000 homes in England have been given planning permission but have not yet been built.

Some major house-builders are undoubtedly either over-cautious or greedy, and need an encouraging kick up the backside from the Government. They are often much keener to build swanky new flats in London for rich foreigners, which command hefty margins, than more modest dwellings for ordinary Britons.

The Government will have to bang some heads together, and become more proactive in the process — the more so if the economy falters for a while post-Brexit. Why not intervene, if the market is failing to produce the number of new homes we need?

Few of us have ever heard of Gavin Barwell, the new housing minister. If one of the biggest challenges of the age is to be met, housing should comprise a separate department with a big-hitter in charge of it

Here it must be said that the housing minister should be a major figure with a Cabinet post (as used to be the case) rather than an obscure minister of state in the Department for Communities and Local Government.

Few of us have ever heard of Gavin Barwell, the new housing minister. If one of the biggest challenges of the age is to be met, housing should comprise a separate department with a big-hitter in charge of it.

Mrs May was right to identify home-ownership as a distant dream for many young people. But unless she shakes things up — and that must include bringing down levels of immigration — there’s no reason to expect that things will get any better.

Britain is falling fast in the international table of home-ownership — below Spain, Italy, France and the United States — and is not far above even Germany, which traditionally has had a very large rental sector.

Who can doubt that there is widespread disenchantment among many young people who can see only long years of renting ahead of them? Such alienation can provide fertile ground for the far-Left.

Noel Skelton and the pre-war Tories were right. Home-ownership gives people a stake in society, an asset which they can hope to pass on to their children. After all the endless talk and chatter, the Government simply has to build more homes.

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Peter A Smith
Peter A Smith

There is in fact a surplus of houses in this country. Unfortunately due to successive Governments’ mismanagement our population has grown far beyond the sustainable limit for our land mass. This is the problem, and should be faced up to.

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