Thursday, 5 December 2013

"Housing supply is poised to become a battleground before the next general election"................................................... The popularity or non-popularity of building more housing

The Sidmouth Independent News blog recently asked the question:
Do more houses equal more votes or less votes? | Sidmouth Independent News 
The question being whether the government has indeed 'lost the countryside' over its push to build more housing:

David Cameron has lost the countryside

Abandoned by trendy urban Tories, the shires are in revolt — and heading for UKIP
61 Comments2 November 2013 

David Cameron has lost the countryside » The Spectator
Conservative support has dropped by a fifth in rural areas, poll claims - Telegraph 
The Spectator's front page: David Cameron has lost the countryside - Countryside Alliance
We must build on countryside so young can own homes, says Cameron | Mail Online 
How the countryside could lose David Cameron the 2015 general election - Telegraph
Don't block new rural homes, David Cameron tells Tories - Telegraph
David Cameron and Cabinet ministers face protests over unwanted developments in backyards - Telegraph

Whilst some would still rate Conservative votes as guaranteed in the shires
From Plebgate to farm gate: the Tories are still the party of the countryside - The Backbencher
and in East Devon too
Futures Forum: "Over-representing parties through the voting system"
Futures Forum: "Over-representing parties through the voting system" ...some figures
nevertheless, concerns have been expressed for at least a year and a half
I'm prepared to risk unpopularity over developing the countryside, says David Cameron - Telegraph 
and the Telegraph's campaign has been running for some time:
Hands Off Our Land - Telegraph
Futures Forum: Telegraph campaign: Hands off Our Land

Now with today's autumn statement, the Financial Times suggests: 
"Housing supply is poised to become a battleground before the next general election"

December 5, 2013 6:15 pm

Autumn Statement 2013: Cash boost aims to speed housebuilding

Big housebuilders are to benefit from a £1bn injection from the government to speed up construction on stalled sites, among measures aimed at alleviating Britain’s shortage of new homes.
The extension of the local infrastructure fund, to be delivered in loans, takes the total amount of money focused on kick-starting slow-moving projects close to £2bn. It represents a fresh attempt by officials to overcome an impasse with building groups over what they see as onerous planning requirements.
In his Autumn Statement on Thursday, the chancellor announced a six-year programme starting with nine sites, including projects in Leeds and Manchester, that the government believes will deliver 27,000 new homes in 2014-15, by helping with the costs of installing utilities or linking to existing road networks.
The fresh £1bn of support adds to the initial £225m of funding announced as part of last year’s Autumn Statement. Another £102m was included in the government’s spending review in June.
The local infrastructure fund is separate to the Get Britain Building scheme, a £570m initiative announced in late 2011 aimed at restarting work on sites that had planning permission.





Housing supply is poised to become a battleground before the next general election, with bodies such as the Town and Country Planning Association warning that England alone needs 240,000 homes a year – well beyond current levels.
Noble Francis, economics director at the Construction Products Association, an industry body, said: “The £1bn programme will only marginally help, and certainly not solve, the chronic undersupply of housing, given that we are currently only building 100,000 homes per year, which is less than half the number of homes needed to meet the number of households created each year.”
The injection was among measures in the Autumn Statement unveiled to counter local objections and ease progress of controversial projects.
They included a trial scheme that would give direct compensation to residents and businesses near major developments, such as the planned High Speed 2 rail line.
Richard Threlfall, partner and head of infrastructure, building and construction at KPMG, the consultancy, said: “Just imagine if the proposals for a new bypass near your house meant that you could be offered twice the market value for it.”
But the British Property Federation, a lobby group, criticised what it called a plan to “bribe individual households to accept new homes, or commercial schemes, that will undermine genuine infrastructure spending or act as an additional tax on development”.
The government also increased the amount that councils could borrow to build affordable homes by £300m over two years.
Borrowing caps were imposed last year to impose more discipline on local authorities but town halls have been lobbying to be given more flexibility.

In depth

Autumn Statement
The year’s statement on the outlook for UK public finances takes place against a more favourable economic backdrop
However, the effect on supply could potentially be offset by the loss of stock as a result of an incentive for social landlords to sell off high-value homes. The move is likely to hit social housing in central London the hardest.
Other measures included the extension of the Right to Buy scheme, where council tenants can buy their own homes. The number of homes sold through the scheme has doubled since the coalition government came to office in 2010, Mr Osborne said. It will now create Right to Buy agents to help buyers through the process, and a £100m fund to help buyers access mortgage finance.
Right to buy discounts were increased to £75,000 in April last year and raised to £100,000 in London in March. The exact level of the new discount has not yet been announced, nor the measures that will encourage local authorities to sell off more expensive stock.
Additional reporting by Kate Allen

Autumn Statement 2013: Cash boost aims to speed housebuilding - FT.com

Such state aid for 'big housebuilders' through infrastructure projects is not what was anticipated by this comment from yesterday's New Statesman: 

"Get behind those young people wanting to get on the housing ladder. Reduce stamp duty significantly for less expensive properties. And demand local authorities guarantee enough land for the self-building of houses, and encourage it within their area, or else lose their veto over new developments."

Osborne must be bold to show the Tories are not "the party of the rich"

And yet, one way or another, a Conservative-led government is proposing state-intervention on a grand scale, as observed in a comment in last week's FT:

November 28, 2013 5:21 pm

Conservatives and the cult of home-ownership

Promoting house-buying is a form of stimulus that does not overtly add to the fiscal deficit
Is the world governed by material interest or the force of ideas? Karl Marx believed it was material interest in the form of class conflict – the latter driven by the state of technology. At the other extreme, John Maynard Keynes asserted that it was the ideas of economists and political philosophers that mattered for good or evil.
The evidence is beginning to pile up on the side of Keynes, although the ideas in question are less elevated than those of the political philosophers. These tentative conclusions are reinforced by the behaviour of the present Conservative-led British government.




Some purist Conservatives may not believe in any economic intervention – or say they do not. But they always do intervene, whatever their leaders say on platforms. And intervention is indeed required when the economy is working below a sustainable level of capacity operation, whether commentators prefer to call such a state of affairs a double-dip or treble-dip recession – or just plain stagnation.
The interesting feature is the form the intervention takes. British governments are inhibited from subsidising manufacturing industry or too blatantly depreciating the currency by international agreements and the fear of retaliation. So when Conservative-led governments are in power, the intervention overwhelmingly takes the form of stimulating housebuilding.
The economic recovery in the 1930s was led by a rash of suburban development in the London area and the southeast. Harold Macmillan’s rise to the premiership in the late 1950s was facilitated by his earlier role in delivering a Tory conference pledge to build 300,000 houses year. Margaret Thatcher was ostensibly a non-interventionist but she surely despised people who do did not own homes. In the present decade the one form of stimulus the Cameron-Osborne regime has seen fit to apply – and that on a large scale – has been to home ownership.
All kinds of respectable-sounding reasons are offered for that penchant. For instance, it is said that homeowners are more likely to vote Tory because they have “a stake in the country”. But there is a simpler and, to my mind, more convincing explanation: it is the one form of fiscal stimulus that does not overtly add to the fiscal deficit. Present stimuli take the form mainly of guarantees to lenders, which are indeed noted in the Budget documents but do not add to the red ink unless and until they are called upon to be honoured.
Does this explanation apply outside the UK? Unravelling the complexities of the US government-sponsored housing finance agencies, Fannie Mae and Freddie Mac, is incompatible with a continued attachment to one’s sanity. But although the older of these two agencies, Fannie Mae, was formed as part of President Franklin Roosevelt’s New Deal, Republicans have not simply sought abolition.
It is better that governments stimulate housebuilding than do nothing at all, or leave everything to monetary policy. It is good that the governor of the Bank of England is on the watch for housing bubbles. But, despite the announcement on Thursday that the Funding for Lending Scheme would cease to support mortgages in 2014, the main emphasis of government support is still on house purchases. My preferred solution is that when demand flags, cash should be put into the hands of residents to spend as they think fit. Frequently they will not spend it well. But do we really think that politicians and civil servants, jockeying for position, will spend it better?
The biggest obstacle to this kind of even-handed approach is the balanced-budget dogma. Not that the latter is being observed. However, George Osborne, chancellor of the exchequer, hankers after it and now talks of it being achieved in the next parliament, should he still be in a position to influence events. The biggest difficulty of those who do not follow him is the lack of alternative. At what level should deficits be permissible? The central government, the city or lesser authority? It would hardly make sense to let everyone fix their deficit by choice, so that every schoolboy could pay for his tuck-shop binge by scrawling his name on a piece of paper.
There is the old examination question about a western traveller who so impresses the inhabitants of a remote island when he pays for a meal by cheque that the cheque circulates from one person to another without being cashed. Who then pays for his dinner? The correct answer used to be: everyone, through slightly higher inflation, when there is full employment; and no one when there are unused resources that can be brought into operation. Hardly a satisfying response when most economies are neither at the extreme of intense slump or full employment. The technocratic answer, that desirable deficits or surpluses should be gauged from economic forecasts, will hardly satisfy after the complete failure of the profession to anticipate the 2008 Great Recession. The most scientific advice now available is: “Suck it and see”.

Conservatives and the cult of home-ownership - FT.com

See also: Futures Forum: Innovative solutions to the lack of affordable housing... self-build alternatives...
Futures Forum: "Changes announced today refocus the Funding for Lending scheme where it is most needed – to underpin the supply of credit to small businesses – without providing further broad support to household lending that is no longer needed.”

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