We’d all like everyone to like us. We’d all like everyone to think everything we do is great. Unless we’re very lucky, that doesn’t tend to be how things are in real life. But apparently it is in CLG-land. I invite you to have a quick look at this news item published by CLG today, summarising the responses by “housing groups” to the long-awaited housing strategy launched on Monday.
You will have spotted two things about that post. First, the reported responses to the strategy are unanimously positive. And there’s no reason to doubt that is the case. For example, Stewart Baseley, of the Home Builders Federation, refers to the proposed mortgage indemnity guarantee (MIG):
This scheme will allow people to buy their new home on realistic terms and help in particular hard-pressed first time buyers.
It will also be a huge boost to house building. Since 2007, the biggest constraint on homes being built has been mortgage availability. This scheme will see more desperately needed homes being built, create jobs and give the economy the boost it needs.
Second, with the exceptions of Harry Rich of the RIBA and Kate Henderson of the TCPA, who give bigger picture responses, all those quoted in the post stand to benefit directly, in the short term, from the policies announced.
That raises a question. What about those who are approaching the issue from a more – shall we say – disinterested perspective?
Well, I suppose it would be fair to discount Mervyn King, Governor of the Bank of England. Because, as Faisal Islam of Channel 4 News reminds us, in 2008 King stated that there was no justification for the state stepping in to underwrite mortgages. Indeed, King described it as a “dangerous move”. So we might take his position as given.
Equally there are those who will respond to the strategy from an overtly political position. Here there is a striking degree of unanimity also. Those on the right, such as Allister Heath at City AM, condemn the proposed MIG for interfering in the market and seeking to prop up a price bubble. While those on the left, such as Left Foot Forward and Red Brick, argue that this is simply a return to the bankrupt practice of sub-prime lending, bailing out housebuilders and an attempt to prop up a bubble. Even the Liberal Democrats aren’t overly impressed. Andrew Stunell, the man from the Ministry, popped up on Liberal Democrat Voice to sing the praises of the policy, and was promptly derided or criticised by most of those who commented on the post.
Other commentators, who are a bit harder to place on the political spectrum, are equally negative. Simon Jenkins in today’s Guardian is absolutely excoriating. But then, I’m sure our friends at CLG would argue, he and this Government have a history, given his high profile opposition to the NPPF. But, in fact, Jenkins is making exactly the same points. And he is not entirely negative. He is willing to acknowledge the sensible proposals in areas such as bringing empty properties back into use.
What about non-political commentators who focus more directly on housing? Jules Birch at Inside Housing did not see great benefit in the proposals for anyone apart from developers, while Brian Green at Brickonomics takes a more market-focused perspective and comes away from the strategy underwhelmed. He is worried that the focus on new build will distort the market and that while the strategy “might prove a short-term palliative it doesn’t look like an answer to the long-term health problems within the housing market”. Dave at Nearly Legal focused less on the new build element of the strategy but was similarly underwhelmed.
Finally, what about members of the academic community who spend their time thinking about housing markets?
Well, David Miles occupies a slightly unusual position in that he has been Professor of Finance at Imperial College but now straddles the Academy and the private sector, as well as being a member of the Bank of England’s Monetary Policy Committee. What cannot be denied is that he is the author of one of the seminal works on housing, the economy and the mortgage market, which is why the Blair government invited him to lead their review of the industry. Miles featured in yesterday’s Telegraph effectively pouring cold water over the Government’s strategy to rejuvenate the housing market. The owner occupied market is unlikely to recover its pre-crash levels and more people will be living in the private rented sector long term. And that is no bad thing.
Similarly, Mark Stephens, Professor of Urban Economics at Glasgow gave his response to the housing strategy to Channel 4 News. Broadly speaking, his view is that trying to sustain prices is the wrong strategy. To regain affordability we need to see real price falls. Stephens is the author of the JRF Housing Market Taskforce report on housing market volatility published earlier this year. He has probably spent more time than anyone else thinking about these issues.
My own response, published yesterday morning, argues very much along similar lines. I think the important point here is that these are not “anti-government” points. I for one am very happy to welcome policies where they will genuinely contribute towards a healthier and more effective housing system. Not just policies on empty homes, but policies on self-build, Community Land Trusts, registers of potential development land, commitment to better design. These are all very welcome initiatives.
It will be interesting to see what happens next. There are plenty of people saying that the MIG in particular is a bad idea – some of us have spent half a lifetime studying the housing market. At best the MIG will be a short term fix. At worse it will make the housing market even more dysfunctional, temporarily support prices well above the level that is sustainable and result in more negative equity and a worse mess further down the track. Will the views of the “experts” carry any weight? Or will these arguments be dismissed as part of the “cosy consensus” that needs to be shattered?
It is clear that a more rounded picture of the response to the housing strategy would look decidedly different to the unremittingly positive one offered by CLG press office. Indeed, my sense of following the commentary is that the balance of opinion stretches from decidedly underwhelmed through to rather negative.
Communication breakdown. Does it always have to be the same?
Image: © iQoncept – Fotolia.com
(With apologies to Led Zeppelin)