Political Heat Intensifies in the Property Market

The discussion has focussed on building on the country’s Green Belt, which has received Labour’s caveated endorsement. Meanwhile, the Conservatives have said they will protect green space amid rows over NIMBYism.

All valid topics of discussion but they ignore the fact that the delivery of new homes is overwhelmingly governed by demand. Demand is regulated by the prices set by housebuilders, which are linked to the second-hand market. 

These, in turn, depend on the state of the economy and the lending market. It’s nothing an Economics A-Level student couldn’t tell you.

Yet the debate has overwhelmingly focussed on more marginal supply-side initiatives.

Building more truly affordable homes of the right type in the right place is a tremendously complex issue. Which admittedly is not a great soundbite for the evening news.

Buying land at existing use value is one possible facet of the response. Such an approach for affordable housing is the subject of an amendment to the Levelling Up and Regeneration Bill, which is currently going through Parliament. Buying land at “no scheme value” was good enough for the last wave of new towns, including Milton Keynes, that were built under the 1946 New Towns Act in the 1960s.

Meanwhile the Renters Reform Bill is designed to tip the balance of power back towards tenants.

After nearly doubling in size since the early 2000’s, the private rented sector has accounted for about one fifth of households in England since 2013-14, according to the latest English Housing Survey. 

So, it seems inherently fair that legislation should reflect the fact there are a growing number of renters in the country.

However, before the publication of the Bill last week, landlords were understandably concerned that a proposal to scrap no-fault evictions increased the risk of them not being able to get their property

The original article can be found here