There is something quite bizarre about Conservative enthusiasm for the Right to Buy policy (to be clear: not the sell-off). Many of the people who may benefit from it aren’t the hard-working families of four of the Tory imagination. Many will be retired. Whisper it: some may be on benefits. Meanwhile, private renters are going to be miffed that they don’t get free money.
On top of this, there is the stance towards housing associations, which seem to me to be following a very Conservative approach to public policy. They are charities – and they are increasingly using the capital markets to provide their essential services.
And now this could be undermined by the new policy. I’m starting to think that (fellow) critics of Right to Buy II, while correct in their analysis have confused something. This is not a policy that represents Thatcherism redux. It’s in fact the opposite. What was once the emblematic Tory policy is now not very Tory at all. Read more
On Tuesday the Conservatives announced what they see one of the most important new policies: extending Right to Buy to tenants in Housing Association properties.
When this idea was floated two months ago I wrote a Since You Asked column which tried to explain how it was emblematic of a 30-year approach to housing: less and less state support for housebuilding and more subsidies for renting and buying. I argued that, to put it kindly, it doesn’t address the problem of housing shortages.
It is hard not to conclude that the fog of nostalgia hangs over Tory policy discussions. Right to Buy is seen as the “aspirational” policy, so, like a faded Hollywood director, the Conservative party has tried again and again to tell the story in sequel form. Read more
The biggest macro implication of the Budget was the chancellor’s decision to ease the squeeze on public spending, a mostly political move to neutralise Labour’s best attack line on the Conservative party — that it doesn’t care about ordinary people.
But there are of course some interesting micro policies, not least the announcement of a “Help to Buy ISA” targeting people saving to buy their first home. The diagram below outlines how the policy is supposed to work. Savers can deposit up to £200 per month into a Help to Buy ISA, which the government will match with 25p for every £1 up to the total government contribution of £3,000. In other words, savers can deposit up to £12,000 and earn a maximum “bonus” taking it up to £15,000. (This doesn’t take into account any possible interest earned on the amount saved.)
This is why the stamp duty land tax was in desperate need for reform:
The chart above, via Neal Hudson, shows the distortions of the “slab system”, where taxes are levied on the whole value of houses above the stamp duty thresholds, as opposed to only the amount above that threshold. The biggest spike was just below £250,000; stamp duty was levied at 3 per cent on properties over £250,000 but only 1 per cent between those between £125,000 and £250,000. This was inefficient. Read more
The Parisian arriving in London by train alights at a resplendent station. St Pancras, and the adjacent King’s Cross, make Gare du Nord look like a provincial hub. The surrounding area, once a ramshackle collection of properties, is gleaming with new hotels, offices and prime accommodation. It is a clear sign of how London’s economic geography has changed in the 21st century. The inner city has developed rapidly. Poverty is moving to the outskirts of the capital. As its core grows faster than its periphery, London is becoming more like Paris. Read more
In the capital, about half of households rent. The other half own.
At present, the official of national statistics’ monthly house price data are a cause of mixed emotions; there needs to be a psychological term for renters’ remorse.
The chart below marks a moment in the history of English housing:
At least since Michael Goldfarb’s incendiary op-ed in the New York Times, there has been discussion about a “great exodus” from London. This chart shows that there is nothing new in recent history about net internal emigration from the capital; young people come for work and to find love, and they leave – if everything goes to plan – with a job, a mortgage adviser, and a partner. Read more
Boris Johnson’s speech on Wednesday night to the Centre for Policy Studies is receiving attention for his comments on cornflakes. In a robust defence of free market capitalism, the London mayor argued that it is the only way to ensure cornflakes, a metaphor for humans, can “rustle and hustle their way to the top”. As ever, it is a rollicking read, perhaps the best recent defence of Margaret Thatcher’s legacy. As ever, on display is a rare example of honest vibrancy in a politician’s language. And as ever, Mr Johnson shows a tendency to come empirically adrift on a sea of his own loquacity. Read more
Urban planning in the later 19th and 20th centuries could be considered a story of two utopias. The first was the garden city movement, which was opposed to urban sprawl, sceptical of central government, fond of local democracy and encouraging of private capital. The second was the modernism of some post-war planners, which favoured large and often tall estates in the heart of cities, or New Towns just outside, both funded by central government. This is a crude distinction but a genuine one, and its story is told well by David Kynaston in Austerity Britain, among other books. In general, conservatives are more likely to become misty-eyed about tales of Letchworth and Weleyn Garden Cities, while those on the left extol the virtues of new towns such as Milton Keynes. Read more
David Cameron announced the figures in the Sun, which shows a picture of him next to a snap of Margaret Thatcher promoting her Right to Buy scheme. It should not take too long to figure out the prime minister’s preferred interpretation of the first figures relating to the mortgage guarantee scheme: the only bubble Help to Buy is inflating is one of happiness in the hearts of ordinary people. Read more
A chart from Savills suggests that those using Help to Buy to purchase their first home will be quite different in the south of the UK from in the north. In the south, the beneficiaries may well end up being income rich, deposit poor. That is unless the lower end of the London property market has been distorted by high loan-to-value mortgages and Help to Buy opens it up. David Cameron tweeted today that the scheme will help many people on an “average wage” but I suspect most of them will be found outside the capital. Read more
It says here that London prices are rising 10 times as fast as those in the rest of the country. It doesn’t sound like there is a great need for Help to Buy where you are.
Is that in the FT? I only read its House and Home section. Read more