The Tories refuse to admit that mass migration is driving the housing crisis

 The Government’s belated new plans are all very well, but will hardly make a dent, given population pressures

Source - Daily Telegraph - 14/02/24

Michael Gove fears that, if young people are unable to own their own properties, they will abandon democracy and fall into the clutches of extremists and autocrats. The Housing Secretary, who has had an almost unbroken tenure in the Cabinet since 2010, frets about the paucity of affordable housing and the impact this is having, as though it just recently became a problem. If only he had been in a position to do something about it these past 14 years.

With an election looming, ministers now profess their deep sensitivity to the issues that are most likely to determine its outcome, yet are strangely in denial about their own role in bringing these circumstances about. Housing, or the lack of it, has been a potent political matter for 30 years or more without any discernible improvement. The Government’s target of building 300,000 new homes a year has never been achieved and was recently dropped.

Mr Gove has now come up with a new package that is somehow supposed to reverse, in a few short months, the failures of the past three decades. It includes an extra £3 billion in low-cost loans to developers to build 20,000 more affordable homes, which is just a fraction of what is needed.

He is also extending the law allowing commercial buildings to be converted into homes without planning permission, to apply to shops and offices of any size. In London, that could create another 27,000 new homes, though they would need to be converted and may not come cheap.

There will be a presumption on councils to “turbocharge” building on urban brownfield sites. Why has this not been done before and why is it restricted to 20 of the country’s biggest towns? It is not as though the idea is a new one. Back in 2014, when the Coalition was battling to reform planning laws to build more in the countryside, there was a policy of “brownfield first”.

But while there are plenty of urban sites ripe for reclamation, it is more expensive and risky for builders because of the remedial costs of preparing and even decontaminating the area. Back in 2014, the Government proposed to offer cash incentives to encourage more homes in towns and cities instead of the countryside. Ten years on, it is not only reheating the same plans but even carrying out a consultation exercise. 

What has happened in the meantime? Where was the national scheme to expedite the clean-up of brownfield sites, or have I missed it? In America, partnerships have been forged between environmental firms and insurance companies to underwrite the decontamination of distressed properties and limit exposure to pollution lawsuits. We should have done the same.

Similarly, the conversion of office buildings could have been speeded up, though more have become available since the pandemic. Since 2015, more than 20,000 homes have been delivered in London through existing permitted development rights, turning smaller offices over to residential use. Net-zero laws may release more as commercial letters struggle to meet the cost of energy ratings.

But there are planning, structural and viability obstacles to converting office buildings, such as adhering to residential space standards, which not all are able to accommodate. None of these ideas will even dent the housing crisis. 

There is clear merit in the revived approach because it is in urban areas that most homes are needed, especially among the young people that Mr Gove is so concerned about. However, they face other difficulties not even touched upon. 

Thousands of young first-time buyers are trapped in flats they cannot sell because they require re-cladding to meet overly zealous rules introduced after the Grenfell Tower fire. Would-be buyers are unable to raise loans until certification is granted. This needs to be sorted out as a matter of urgency. Stamp duty should be cut or abolished to loosen up the market, especially for those seeking to downsize. 

More lenders need to relax deposit rules because saving enough money is often beyond the ability of many would-be buyers, even if they can afford the mortgage. Instead, they pay extortionate rents – which might be pushed up even further if landlords leave the market because of Mr Gove’s Renters’ Reform Bill now before Parliament. 

Above all, neither Mr Gove nor Rishi Sunak are willing to concede that the reason there are too few homes available is because there are too many people, and that is down to a population increase, driven almost entirely by immigration.

In 2010, the UK population was 62.3 million. The Office for National Statistics projects that it will grow to 70 million by 2026 and then to 74 million within 15 years, with the rise almost entirely down to immigration. The housing crisis is just one manifestation of the attendant population increase. 

Belated new restrictions, including a ban on most international students and care workers from bringing family members to the UK with them, should bring numbers down but far too late to make a difference. 

Indeed, all the Government’s woes can be traced to a failure to control immigration, a deliberate policy because as the latest startling labour market figures from the Office for National Statistics show, foreign workers are needed to fill the jobs that millions of inactive Brits refuse to do. 

Immigration began to take off in 1997 but was simply not talked about, which meant that there was no planning for the inevitable pressures it brings. Until the mid-1990s, the actuarial assumptions that underpinned government forecasts of future public service requirements were based on an almost steady population.

The extra homes, hospitals, schools, doctors surgeries, transport links and the like that are needed for such a large number of people have not been provided in sufficient quantities, which is why there is so much pressure on those services.

In a newspaper article to launch the Government’s latest initiative, the Prime Minister said that we need to build homes in the places where people need and want them and “we must ask not just ‘how many’ but ‘where’.” However, it is failing to ask “why” that will cost the Tories the next election.