As we ready ourselves for what has become an annual pilgrimage to the polling booths, in terms of finance there is little doubt that housing is taking centre stage in this election.
This was not always the case. It’s true that if you look back to newspaper coverage of the housing crisis in the late 1940s and 1950s, post-World War Two, some of the articles could be reproduced word for word in tomorrow’s nationals. But in the 1980s and 90s, back when the structural undersupply of new homes was just getting truly entrenched, housing didn’t seem quite so important.
This is one of the reasons why it is escalating back up the agenda now, with Jeremy Corbyn announcing on the campaign trail that housing was his top priority. The challenges in the housing market are myriad – resulting in a shortage of housing in many areas where there is strong demand. The scale of problem is best illustrated by the government’s recent housing white paper which was actually called 'Fixing Our Broken Housing Market'.
So as the election nears, what are the politicians pledging to do? All parties are in agreement that housing supply needs to be boosted. But the scale of the increase needed varies. The Conservatives are sticking to a previous pledge of 1 million new homes between 2015 and 2020, as well as adding in an extra 500,000 by 2022. Labour has gone for 1 million homes by 2022 (the end of the parliament) while the Liberal Democrats are aiming for an annual supply of 300,000 homes a year by 2022.
What no political party makes clear is by what measure they will be judging this progress. However, they can’t be blamed for this. There has been a bit of a debate around property data over the last year or two – and that is why in some of the manifestos there is actually mention of a data overhaul.
It is now generally accepted that the measure of new housing has switched from the red line (construction completions) to the blue line (net supply) as shown in chart below. Using ‘net housing supply’ gives higher numbers than the traditional data – which in turn gives the policymakers a head start when it comes to meeting their targets.
Even so, Knight Frank's analysis shows that new housing delivery in England is likely to have risen to more than 200,000 in 2016/17 – a substantial threshold to cross. But whether that level can be maintained for five years in a row, as Labour has pledged, or rise to 300,000, as the Lib Dems would like, is not a foregone conclusion.
This is why you will hear so much discussion about the nuts and bolts of construction from the parties - how they want land to be delivered, how much should be paid for it, who will build homes (there are many promises of councils re-entering the market as developers, something which they have not done since the 1980s), what mix of tenures will be offered (there is a big emphasis, rightly so, on the delivery of affordable housing) and support for the investment coming into the build-to-rent or multi-housing sector – another source of new housing.
You can see how the main parties’ manifestos compare here: http://www.knightfrank.co.uk/blog/2017/05/18/uk-election-housing-manifesto-pledges.
While politics necessarily breeds division, any possible cross-party consensus should be sought on delivering housing – and there is one more thing that all at Westminster should agree on: appointing a politician to oversee housing with a longer-term view. There have been nine housing ministers in the last decade alone. Gavin Barwell has been in post for just over two years now, and everyone agrees he has done an admirable job in getting under the skin of the housing market – but every time there is a re-shuffle it is back to square one, even with highly-informed civil servants in the wings. So promote the housing minster to the Cabinet, and keep them in the post for the term of parliament.
Gráinne Gilmore is Head of UK Residential Research at Knight Frank