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Serfs don’t vote Tory The new housing minister is the only man who can save the party from extinction

The man with the biggest job in the country. Photo credit should read BEN STANSALL/AFP via Getty Images

The man with the biggest job in the country. Photo credit should read BEN STANSALL/AFP via Getty Images


September 21, 2021   5 mins

Boris Johnson has placed the fate of the entire Government and the Tory party’s future in the hands of Michael Gove. In his new role as Secretary of State of Levelling Up, Housing and Communities, the longest serving member of the Cabinet now has its most important job.

In the short term, there’s the next election — which will be won or lost in the former Red Wall. If the Government doesn’t make some progress with the levelling-up agenda it promised new blue voters, it may well face defeat. In the long term, it is facing extinction. Younger voters don’t vote Tory — and show few signs of doing so as they get older. And who can blame them? If you exclude an entire generation from home ownership, then they won’t become Conservatives.

So levelling-up and solving the housing crisis are top priorities — and Gove is now responsible for both, although the latter in particular might be considered a poisoned chalice. A few years back, when his department was called something else, I did a stint as a lowly speechwriter. Every morning I’d walk past a wall of portraits — framed photographs of the men and women who used to do Gove’s job — and the thing that struck me was the turnover, most of them only spending a year or two before the impossible job got to them. In the last five years, four more portraits have been nailed to that wall. Greg Clark (who I worked for), Sajid Javid, James Brokenshire and Robert Jenrick — they’ve all been and gone, while the average house price to earnings ratio has continued to rise and rise.

Gove’s first problem, like that of his doomed predecessors, is that most of the important decisions are made elsewhere — principally Downing Street and the Treasury — and the people making the decisions often haven’t got a clue what they’re doing.

The Treasury, for instance, has just blown the best part of £5 billion on a stamp duty “holiday” that wasn’t needed. They did this because they thought that Covid would crash the property market when, in fact, the exact opposite happened — another win for economics experts! House prices have in fact surged — and not because of the tax break. We could have built a lot of social housing with that sum, and made at least some inroad into a queue of over one million households waiting for a property.

But after eleven years of not solving the housing crisis, I wonder if this Government even understands what it is anyway. Typically, it’s presented as a problem of supply — i.e. we’re not building enough houses. But much more to the point, it’s a crisis of affordability — i.e. house prices and rents are too high. Unless prices fall — or at least stay still long enough for wages to catch up — then building more houses won’t solve the problem.

Same difference, you might think — by building more homes we’ll bring prices down. Except that’s not what the Government wants to happen. More houses, yes — but ministers are too afraid of the Daily Telegraph to actually call for lower prices, which would be disastrous for the electoral core support of the party. And in case you were wondering, we can have one without the other. As long as any extra supply is outstripped by increased demand — especially from professional property investors — then we can continue to build while prices continue to go up. This is how property booms work.

Absurdly, we still view rising house prices as a measure of prosperity, when in reality, it’s a vicious form of inflation that hurts the poorest and sucks value from the productive parts of the economy. It doesn’t even help ordinary homeowners, not unless they’re planning to downsize, and the only winners turn out to be landowners. That’s not just a few lucky farmers, but all those involved in the control of the land supply, including developers, consultants, lawyers and financiers: there’s a huge vested interest in not solving the housing crisis.

When he was Secretary of State for Education, Michael Gove famously took on “the blob” — the forces in the education establishment who didn’t want his reforms to succeed, because it suited them.

But the education blob has got nothing on its housing equivalent. The former was ideological, and almost entirely Left-wing, which makes it easier for a Tory government to challenge. Not so the housing blob — also known as the “the landed interest” — which has infested the Conservative Party for centuries. Being within the party itself, but working against the party’s long-term interests, it is a far more powerful and persistent lobby.

Gove, of all people, should also be wary of “experts” who say that they know best, but who keep getting it wrong — and on this issue they’ve been getting it wrong for years. Thanks to their influence, we’ve had bill after bill bashing away at the planning system as if it were the big obstacle, under the enduring myth that we don’t build enough houses because councils won’t allow them to be built. Yet that theory doesn’t square with the massive backlog of unused planning permissions. We have the building sites, so where are the houses?

It’s as if the bottleneck lies elsewhere, which of course it does. It’s not council planning officers who control the rate at which permitted land is turned into actual houses, but the big developers. Having purchased the land on which they say they want to build, they’d lose money if its value fell. So, they’ve got every incentive to ration supply to local housing markets. Whether you want to call this “land banking” or go in for some fancier explanation doesn’t matter, since it boils down to the same thing.

But there is a solution. In many other countries, the state supplies the land along with the planning permission. Under this system, a local or national agency would purchase a site, put in the basic infrastructure, and then sell it off as ready-to-build plots to those who intend to live there. Building firms, large and small, would still bid for the construction work, but they’d have no involvement in the buying and selling of the land — and so they’d have no incentive or ability to ration its supply.

We also need action on the demand side. Aspiring homeowners have to compete with buy-to-let landlords, absentee foreign investors and now major financial institutions. Even to people who believe in the free market, this cannot be right. A house should be a home, not an investment product.

If the Chancellor wants to raise some more revenue, then he should whack up taxes on property speculation instead of jobs. And if Rishi Sunak won’t act, then Michael Gove could do so, by using the planning system under his control. For instance, he could make at least 80% of new planning permissions conditional on owner-occupation — and charge fat planning fees on the rest.

This would require new legislation, but Gove should welcome that. He’s just inherited a planning bill whose main provisions are now dead in the water. Wisely, he’s “paused” these reforms, but before scrapping them all together, he’ll need something better to put in their place.

I’d recommend a radical programme to end land banking by the big developers and to push speculation out of the housing sector. Obviously, this is interfering in the marketplace, biasing the whole system towards aspiring homeowners. But so what? If the Conservative Party has to choose between ideological purity and home ownership, it’s no contest.

Without change we’re heading to a very different future — in which the landlord class further takes over our housing stock and owner-occupation goes into free fall, especially in the larger cities where most of the jobs are. This is the new road to serfdom — and serfs don’t vote Tory.


Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.

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Sharon Overy
Sharon Overy
2 years ago

Well, it would be a lot easier to tackle if the government weren’t doing their best to shovel as many people into the country a possible.

Whilst the demand for property is ever-increasing, so will the price of it be.

Billy Bob
Billy Bob
2 years ago
Reply to  Sharon Overy

Population growth has been fairly stable in the UK since the war. The population grew 10 million between 1945-1985 with little difference to house prices, in fact homeownership rates climbed significantly in this period. It has increased another 12 million from 1985-2021, and in that time house prices have rocketed and homeownership rates have been steadily falling for the last two decades.
Whilst I think immigration, especially the low skilled variety should be reduced significantly, I don’t think it can be blamed solely for the housing crisis

Andrew Lale
Andrew Lale
2 years ago
Reply to  Billy Bob

City Eye: Facts on a plate: our population is at least 77 million | The Independent | The Independent based on the records from utility companies, the population of the UK is between 77 million and 80 million. That means that between 2004 and 2021, the UK population has gone up potentially by seventeen million. The 66 million number is the fake number produced by the ONS to make sure the oiks don’t get restive.

Billy Bob
Billy Bob
2 years ago
Reply to  Andrew Lale

I’ll take that opinion with a pinch of salt personally. It’s all based on “anonymous” sources and vague guesses on how much people eat, it doesn’t appear the most thorough of studies to me

D Glover
D Glover
2 years ago

When I was born in the early fifties the UK population was just under 50 million. Now it is 68 million and rising. That is why we need more houses, which suits the landed interests very well.
Before you vote Conservative again ask what, if anything, they want to conserve.

Peter Styles
Peter Styles
2 years ago

Previously developed land should always be prioritised over green belt locations.Where significant infrastructure issues are identified in urban locations ( contamination etc) then developers should be incentivised via the tax and planning system. This approach alone should address the numerous blighted former industrial sites throughout the Midlands and North of England.

Andrew Fisher
Andrew Fisher
2 years ago
Reply to  Peter Styles

Been there, done that! Tinkering at the margins compared with what is needed.

Andrew Lale
Andrew Lale
2 years ago
Reply to  Andrew Fisher

Concrete the green belt so that all those Afghans, Poles and Somalis have an itty bitty box to live in. Hurrah for old Blighty.

David Uzzaman
David Uzzaman
2 years ago

I agree with the articles basic premise that the government ought to intervene to prevent the small number of corporate builders controlling the supply of new homes by buying up every decent piece of land likely to get planning permission. The other factor that had mitigated against buyers has been the ridiculously low interest rates which have both pushed up house prices and brought older savers into buying houses for rent because they cannot get any return on their savings. That particular problem is probably above Mr Gove’s pay grade.

D Ward
D Ward
2 years ago
Reply to  David Uzzaman

A lot of people invested in buy-to-let when Gordon Brown raided their private pensions. Which I understand. If you think the Government is going to pinch your pension, you find an alternative way for securing your income in old age.

John Riordan
John Riordan
2 years ago
Reply to  D Ward

Crash Gordon did a lot of extremely stupid things, the pensions industry vandalism being right up there with the gold selloff etc.
What’s often forgotten though is that the New Labour effects on property ownership were actually deliberate as far as he was concerned: he wanted housing wealth to be privately owned and inherited, and openly said so on many occasions. I’m sure he didn’t intend the now-broken market in housing that is captured entirely by various groups possessing access to capital that is denied to those who would like to get on the property ladder but can’t, but then again it is arguable that blaming him for this is the same sort of silliness that lefties indulge in when pointing at Margaret Thatcher on the same issue.

Mark Gourley
Mark Gourley
2 years ago
Reply to  David Uzzaman

Agreed. Even in Italy the housing market is managed better than here in the UK – and they have the Mafia to cope with.

Richard Barnes
Richard Barnes
2 years ago

As usual with all articles on housing and house prices, the author ignores the elephant in the room: the enormous and continuing increase in the population of the UK, especially that part of it that lives in the south-east of England.
The first action to stabilise house prices is to stabilise population numbers and introduce policies to reverse the reduction in average household size.

Dr Stephen Nightingale
Dr Stephen Nightingale
2 years ago
Reply to  Richard Barnes

Reversing the reduction in average household size means young people getting together, having families and staying together. Which seems to be the exact opposite to the Sugar Daddying tendency in the article adjacent to this.

Some way of bringing both young men and young women to emotional maturity before it is too late for them to raise healthy families, seems to be needed.

Ethniciodo Rodenydo
Ethniciodo Rodenydo
2 years ago

Amen to that

Martin Adams
Martin Adams
2 years ago

Hear, hear!!

Christine Bryant
Christine Bryant
2 years ago
Reply to  Richard Barnes

I’m so pleased to hear someone point this out. If you live in East Anglia or the South East you will be confounded by the idea that “We” are not building enough houses when you see the apparently unstoppable developments springing up in every town and village anywhere near a main road or railway station, destroying the local character and overburdening the services of everywhere they touch. How can people be so blind to the massive explosion in population over the past twenty to thirty years in England, almost entirely down to immigration? At the same time we hear of those inside and outside the country making money from investing in houses subsequently left empty. It is a huge problem that needs to be aired dispassionately if there is ever to be a solution.

Andrew Lale
Andrew Lale
2 years ago
Reply to  Richard Barnes

Where is this ‘enormous and continuing increase in the population of the UK’ coming from? Our birth rate is 1.1, which isn’t even replacement.

L Paw
L Paw
2 years ago
Reply to  Andrew Lale

It’s not just immigration that is driving the housing issues, it’s smaller household sizes requiring more properties.

ralph bell
ralph bell
2 years ago

Great article. Nothing would give people a stake in society and their community more.
What about all the large houses occupied by elderly single people needing incentives to move out.
The unoccupied investment properties area scandal ripe for penalties.
Seeing the huge swathes of high rise apartments in Vauxhall and Manchester as foreign investment havens stinks of massive corruption.

Last edited 2 years ago by ralph bell
Alan Thorpe
Alan Thorpe
2 years ago
Reply to  ralph bell

Did you read the part saying a house is a home? I’m not moving out of my house into a shoe box in a high rise.

D Glover
D Glover
2 years ago
Reply to  Alan Thorpe

Have you read Lionel Shriver’s latest book ‘Should we stay or should we go?’?
In chapter 10 she imagines a future when the refugee/population/housing problem is so severe that squatters occupy spare bedrooms in old people’s houses. Crazy?
Well, there are a lot of old couples in big houses that their families no longer fill. There are a lot of women made single by divorce or widowhood. There are a lot of empty bedrooms in this country.

Caroline Watson
Caroline Watson
2 years ago
Reply to  D Glover

Yes. I have two. And they’re mine.

D Glover
D Glover
2 years ago

Just to clarify; Lionel Shriver wasn’t suggesting refugees in your house as a policy. She envisaged them pushing their way in. They know you don’t have a firearm, and the police will be far too busy.

Christian Moon
Christian Moon
2 years ago
Reply to  Alan Thorpe

Leave the flats for families with young kids to squeeze into instead. How can that be right?

Iris C
Iris C
2 years ago
Reply to  ralph bell

The policy of Care in the Community has led to the elderly continuing to live in large family houses, tended by care workers, who are always on the move, giving fast and limited care to a small number of people.
Such care will always be needed to some extent, but it would help if there were more attractive very-sheltered housing available (with communal areas) where the elderly can have their own furniture.

Deb Grant
Deb Grant
2 years ago
Reply to  ralph bell

Have you taken into account the fact that downsizers actively compete with younger first time buyers for smaller properties in half way decent locations?

Deb Grant
Deb Grant
2 years ago
Reply to  ralph bell

Margaret Thatcher knew that home ownership gives people more of a stake in their community and society. It also encourages people to spend money doing them up, benefiting the economy. That’s why her Government sold off many council owned properties to their tenants. That also benefited owners’ descendants and pulled millions of families out of poverty.

David Morley
David Morley
2 years ago
Reply to  Deb Grant

It also helped to kickstart the house price boom which we are now seeing the long term effects of. The presence of an alternative to buying at a relatively low price tends to suppress house prices.
As a result we now have a housing stock of houses which are smaller, of lower build quality than council houses were, packed into a smaller space – and barely, if at all, affordable for young families.
But at least when they are sixty and childless they’ll inherit a bit when mum and dad pass on and pass on their wealth.

Jon Redman
Jon Redman
2 years ago
Reply to  ralph bell

What about all the large houses occupied by elderly single people needing incentives to move out.

Easy: abolish stamp duty. Despite what the article would have us believe, properties flooded onto the market when it was suspended – and dried up when it stopped.
Elderly single people in need of care aren’t going to sell their house and pay a six-figure sum in stamp duty for the privilege of downsizing. They may be needing that money for care. So they do equity withdrawal instead, which means they stay in the house and it’s not sold.

Billy Bob
Billy Bob
2 years ago
Reply to  ralph bell

An annual levy of 10% of the properties value on any empty dwelling or undeveloped land should soon fix it

Andrew Lale
Andrew Lale
2 years ago
Reply to  ralph bell

What sort of incentive were you thinking of to remove elderly people from their beloved homes? A mob of ‘lovely young people’ wielding torches and pitchforks?

D Ward
D Ward
2 years ago

stamp duty is a regressive tax on moving house and should be abolished. in that respect, the Treasury didn’t “blow” billions on a stamp duty holiday.

Jon Redman
Jon Redman
2 years ago
Reply to  D Ward

100%.
The tax on moving is so heavy it’s up there with those on vices, such as alcohol and tobacco.

David Morley
David Morley
2 years ago
Reply to  Jon Redman

Totally agree – though perhaps for different reasons. The last thing we need is anything which motivates people to be inflexible and unimaginative in their career choices and progression.
Rather startlingly 60% of adults in the U.K. still live within 15 mins drive of their mum. And it’s easy to see why. Look all around and you will see unimaginative people of very average intelligence, in very average jobs who have done very nicely thank you by never really leaving home.
Encouraging a vibrant economy, full of imaginative people with wide experience of work and life? Not so much.

Alan Thorpe
Alan Thorpe
2 years ago

Isn’t the message here that the government never solves problems and creates more with everything it does. It should keep out of our lives. The idea of “levelling up” can only mean taking from the rich to give to the poor. The rich will go elsewhere or stop working as hard if their money is taken in taxes, so in the end socialism will do what it always does and make us all equally poor, except for those in change.

Andrew McDonald
Andrew McDonald
2 years ago
Reply to  Alan Thorpe

Well, ‘levelling up’, that grim and witless phrase, might also mean ‘stop giving more to the rich and give it to the poor instead’, I suppose, rather than taking anything away from anybody. But I guess capitalism (like all ‘big’ solutions) will just go on making us all equally poor, except for those in charge
.

Andrew Lale
Andrew Lale
2 years ago

Trust a commie to imply that capitalism is a system, whereas actually it is NO system. Communism is a system, where coercion replaces choice. Capitalism isn’t anything, just people doing what people do- buying, selling, choosing, rejecting.

John Riordan
John Riordan
2 years ago

Great article, something I’ve been saying for some time myself. As a homeowner, I say that it’s all very well sitting on an appreciating asset that’s worth more than my pension, but I am not daft enough to imagine that I can retire on it when the time comes if the only people who can afford to buy it off me are institutions and corporation-sized BTL landlords. The electorate will have voted to slap a massive wealth tax on us all way before we ever get to that point, and as the article above argues, who can blame them? If you want the benefits of a property-owning democracy – and those benefits are real and substantial – you can hardly eliminate the part where millions of voters actually own property.

The choice isn’t between rising house prices and falling house prices, it’s between affordable house prices or the return of State-mandated marxist rapacity.

Last edited 2 years ago by John Riordan
Deb Grant
Deb Grant
2 years ago

This is barking up the wrong tree. The housing market IS about supply and demand. The UK population has increased by tens of millions in 30 years and 1 and 2 person households have also increased exponentially. The problem in our small islands is simply that we can’t build enough houses where people want to live and where there are jobs. It is a mistake not to recognise that young first time buyers are competing with affluent downsizers in the most fashionable urban locations where there are scant brownfield sites to satisfy demand. Nor do we have public transport satisfactory enough to enable longer commutes to less populated areas (despite technology facilitating more home working).
There is also a point about aspiration in that the young want now what it took decades for their parents and grandparents to achieve.
It’s also a red herring to blame landlords. We need landlords. No landlords means no rental properties, let alone affordable ones. If there is no investment, there is no money to finance old age.
If people wanted to live where developers actually hold approved building land, most developers would build to satisfy the demand. Planners do need to make it easier but they also need to ensure that the needed infrastructure for development is there. They then need to stipulate a closing date for development to begin.
The only original point which had merit described the way new developments often work in Australia. This is where landlords sell individual plots direct to the public who choose their own builders and housing style. There are still large building companies with economies of scale on materials and with lots of well designed floorplans but they don’t control the whole development. Councils normally insist on building within 2 years so that plots don’t lie empty.

Margaret F
Margaret F
2 years ago
Reply to  Deb Grant

Yes we do need landlords but I think more should be done to differentiate between big corporate investors and individuals who own only a few rental units, especially where the individual occupies one of the units in the building. There are many types of tax breaks and regulations that could be implemented to encourage and support small scale landlords investing in their own communities

Jon Redman
Jon Redman
2 years ago

we still view rising house prices as a measure of prosperity, when in reality, it’s a vicious form of inflation

Despite which obvious truth, there’s always someone along to demand “capital gains tax” on house prices, exactly as though it’s not just inflation.
How much of a gain you’ve made on your house becomes clear as soon as you sell your house, bank your supposed “gain” and try to buy another like it for less money. Funny thing is you tend to need all the money for the next house!

it’s presented as a problem of supply — i.e. we’re not building enough houses.

Which it is. The transaction tax on selling your house and buying another is so colossal that nobody does it unless they’re forced to.
I live in an unremarkable house within the M25 worth about ÂŁ1.5 million. If I wanted to sell it and move to a different place at the same price – more space, or better location, whatever – the stamp duty would be NINETY-ONE THOUSAND F*CKING POUNDS. Add on the ÂŁ21,000 I’d have to pay an agent and say another ÂŁ5,000 for the conveyancing etc, and it’s the thick end of ÂŁ120,000 to do the trade, over 75% of which is tax.
That sum is literally years of disposable income – and I’ve got a job. If I’m an old biddy living alone in a 5-bedroom house with a pension, I am simply not going to contemplate such an appalling bill. I will instead take out equity withdrawal, or something, because I need that ÂŁ120,000 for a couple of years of care. In either case, mine or the old biddy’s, the house is simply not sold.
Stamp duty should be ÂŁ50. Watch how many houses come on to the market when you remove it.

emmet.coldrick
emmet.coldrick
2 years ago

Some of what is going on, and has been going on for some time, in the property market is very well explained by Dermot Desmond in an article in the Irish Times. Desmond is a billionaire property developer who used to own London City airport. His article is about the housing situation in Ireland, but the same forces are at work, generating the same problems, in England. I can’t link to it here but it’s called “Everyone has a right to a home. Here is how it can be done.” If you have an interest in housing policy, it is well worth a read. I hope Gove reads it.

Andrew Lale
Andrew Lale
2 years ago

‘Typically, it’s presented as a problem of supply — i.e. we’re not building enough houses. But much more to the point, it’s a crisis of affordability — i.e. house prices and rents are too high.’ Hilarious. Forget supply and demand. That’s old school. The real equation is supply and… affordability. That’s so stupid, only a Conservative would say it. As ever with articles about housing, I immediately do a word search for ‘immigration’. If the word count is zero, I don’t bother reading it. Any discussion of our hideous under-supply of housing which doesn’t talk about WHY we don’t have enough housing, when our birth rate is 1.1 children per family, is not worth the pixels or paper its written on. We don’t have enough houses because we keep on importing hundreds of thousands of foreigners. The words that every single Conservative has sworn on a copy of Das Kapital not to say.

Ann Ceely
Ann Ceely
2 years ago

Our Thatcherite friends should love the idea of ensuring there will be lots of new home owners!

Last edited 2 years ago by Ann Ceely
Christopher Barclay
Christopher Barclay
2 years ago

The problem for the Conservatives is that they need to lower house prices to affordable levels while keeping them sky high to encourage consumption.

Deb Grant
Deb Grant
2 years ago

That’s a little back to front. If the impossible were achieved and Government were able to lower house prices and we lived in cheaper, Government (taxpayer) subsidised housing, surely we’d have more disposable income to blow on boosting the economy? Oh wait, perhaps not. We’d all be paying higher taxes to fund it.

Franz Von Peppercorn
Franz Von Peppercorn
2 years ago
Reply to  Deb Grant

You were right the first time. By spending more on a mortgage we spend less on other items. I’ve never seen an economist point this out though.

Last edited 2 years ago by Franz Von Peppercorn
Andrew Sainsbury
Andrew Sainsbury
2 years ago

This piece seems to be suggesting that big government centralised management has caused all the problems and the solution is more of the same…

Sue Whorton
Sue Whorton
2 years ago

When my parents in law bought their house in a Hampshire village in 1957, it cost about ÂŁ600. The first big price hike came when mortgages were allowed for 2 incomes not one. It was sold in 2012 to pay for my mother in laws care for ÂŁ325,000. Housing is so tied up to other policies. Social care, the environment, child care, the knock on effects on working tax credits. We are still thinking we can control outcomes but whatever is changed will cause distress somewhere.

Jeffrey Chongsathien
Jeffrey Chongsathien
2 years ago

Any conversation about housing prices will seldom touch on central bank Ponzi money-printing, corrupt politicians and goverment at all levels, mass immigration, foreign ownership, mult-residence ownership, corporate ownership, pastiche low-density architecture, urban sprawl – all contributing to the ruin of the UK.
Violent revolution is genuinely the only option left. The populace is too dumb/lazy/corrupt to effect change any other way.

Last edited 2 years ago by Jeffrey Chongsathien