I read a story recently that made me raise an eyebrow.
It explained how senior Tory Ministers were growing increasingly convinced that housing reform could hold the key to unlocking success at the next general election.
Why on earth has it taken the Government more than a decade to realise this?
Providing access to affordable, quality housing – both for those looking to rent and those able to buy – should now be at the very top of Rishi Sunak’s to-do list.
Labour is increasingly seeing the importance of the issue. Personally, I applaud them for pledging to build on more brown and greenfield sites.
Such pledges won’t be universally popular. Indeed, a poll last week suggested support for the Tories in blue-wall seats has increased on the back of Labour’s pledges to try and rip up planning rules.
“We’re not afraid of making tough choices,” Keir Starmer said after details of that poll emerged.
Time will tell if that really is true. The timing is certainly good. Right now confidence is growing in the market.
For a long time, there was concern that the housing market would be mortally wounded by the impact of Liz Truss and Kwasi Kwarteng’s doomed mini-budget.
But I think the last few days have underlined that we are finally shrugging off the impact of what unfolded last September.
This was particularly well-illustrated via the release of new data on house prices. According to the ONS figures, house prices increased 4.1 percent in the 12 months to March 2023.
This means £11,000 of value was added to the typical home. The average price of a property now stands at £285,000.
However, on a monthly basis, prices have fallen for the fourth consecutive time, decreasing 1.2 percent in March 2023, following a slight drop of 0.1 percent in February 2023.
The annual rate of growth also slowed, down from 5.8 percent in the year to February 2023, according to the data.
It is a mixed bag, yes. But these numbers indicate to me that buyers and sellers are finally shrugging off the worst effects of last September’s mini-Budget. And, make no mistake, the market is undoubtedly in a stronger place than it was at the end of last year.
Confidence is slowly returning, particularly as inflation is beginning to fall and expectations grow that interest rates are at or near their peak.
Inflation is also now moving in the right direction, although the rate at which food and other household items are soaring continues to unnerve me. So too does the cost of our gas and electricity.
But another thing that really dismays me is the Government’s dithering on its reforms to the leasehold system.
Whether you agree or disagree with the reforms Michael Gove announced earlier this month, his move to effectively pause any final decision doesn’t benefit anyone.
Uncertainty is the catalyst for all problems that exist within the property sector. The pandemic proved that beyond any doubt.
So the uncertainty that the Government has created in this area will not help encourage people to enter the property market.
Another knock on effect will be that we will likely see even more landlords exit the sector altogether. This may create a small boost in the supply of housing but it will also potentially push rents up even higher in some areas.
What we truly need is long term planning and a roadmap which signposts a way out of the housing supply crisis.
At the moment it simply isn’t there.
