Selling off social homes is not the answer to the housing crisis

We are told that there were arguments between Boris Johnson and his secretary of state ahead of the prime minister’s recent speech on housing. I can well imagine how dismayed Michael Gove would have been at his wounded boss and his desperate attempts to regain the political initiative following the vote of no confidence. While Gove has expressed himself convinced of the benefit of building social homes as a means of solving the crisis of supply and affordability, Johnson announces a plan to sell them off…

Many of us might have hoped to hear more of Gove’s planned infrastructure levy and how this will actually enable local authorities to fund desperately needed socially rented homes. There is a real possibility that the as yet un-announced detail of this policy might enhance the ability that many boroughs have already demonstrated to develop high quality housing. There are also unanswered questions as to how this policy might contribute to levelling up, by redistributing development profits geographically.

But no! Despite the prime minister having been assuredly told that the Right to Buy for housing association tenants won’t work, he digs out a policy that pilots have already proved to be ineffective. The discounted sales values were never enough to afford like-for-like replacements to be built.

The Treasury surely won’t find money to compensate housing associations already burdened by massive costs to repair defective stock. The idea may appeal to Johnson as an echo of Thatcher’s call for a property owning democracy but, like so many of his ill-thought-through policies, at best it is sure to be quietly abandoned. Worse for him, it will founder in a shower of recrimination just as his need for approval is at its height. 

Despite Johnson having been assuredly told that the Right to Buy for housing association tenants won’t work, he digs out a policy that pilots have already proved to be ineffective. The discounted sales values were never enough to afford like for like replacements to be built

Surely, he will have been reminded again and again that demand-side subsidies like Help to Buy have had a massive inflationary effect on house prices. The housebuilders are quite open that they have no need of this government support if it is aimed at increasing supply, their business model relies on regulating the flow of new homes onto the market.

Young mortgage-holders will be beginning their climb up the property ladder with 90% mortgages at a time when nobody can predict how high interest rates are going to rise, and what the impact of the energy crisis and inflation on disposable income will be.

Now we have the grotesque misconception that the least well-off might be able to use their housing benefit to buy their homes even as more and more join the queues at foodbanks. What is predictable though, is the flood of foreclosures these policies will bring. 

The price we will be paying for Boris Johnson’s fight back from the vote of no-confidence is a series of hastily contrived shopping-trolley policies aimed at restoring the previously party-faithful irrespective of the potential for the damage caused

There was talk in trails of Johnson’s housing speech in Blackpool that modular homes might feature as a means of accelerating supply. That this was dropped in the event looks like yet another wrong-footing for the prime minister.

We have also just seen the publication of research by Cambridge and Napier Universities that HTA’s modular housing designed for Tide Construction takes half the time to build and is half as carbon intensive as mainstream construction. If only he had waited, Johnson might have had some sound evidence in support of the very policy initiative that he chose to abandon.

The price we will be paying for Johnson’s fight-back from the vote of no-confidence is a series of hastily contrived shopping-trolley policies aimed at restoring the previously party-faithful irrespective of the potential for the damage caused. If the prime minister gets his way, sensible housing policy will once again become the victim of political popularism.