Speakers at the day long Senate, held under Chatham House rules, also noted it was unlikely the Help to Buy scheme would remain in its present form post-2021 and that there needed to be a series of solutions to the housing crisis.
Several speakers suggested that housing policy was being used as a political football, with concerns about the capability and functionality of the current government to support the country.
“Brexit is the biggest risk to the UK economy, but housing is a close second,” explained one speaker.
“The state of the government at the moment, the uncertainty that is created by Brexit is not helpful for the UK housing market or the UK new build sector. You need successful, capable, functional government to make things work,” continued another.
This was echoed by a further speaker, who added: “Quite clearly housing policy is in play and one of the difficulties for us all is there’s quite a high level of political risk around housing generally and not least new build.”
Speakers highlighted how damaging the frequent changes in housing minister were to the industry, with 15 ministers having been in post over the last 20 years.
“Can we build our way out [of the current housing crisis]? We can but it’s a very long-term project but politics is very short term,” explained one speaker.
“It’s a 20-year project and really ministerial tenure is short – the speed with which they are going through the job is increasing, the urgency to deliver short-term incentives is rising by the year and the delivery of a long-term solution is something that falls away.”
There was some praise for the enormous range of initiatives and huge sums of money the government is spending to enable housing supply to improve.
But it was highlighted that this was becoming ever more urgent and more top down, with criticism for the Conservatives for ripping up previous policies and then reinstating them.
This could bring clashes between central and local government which can disrupt and delay the building process.
And prime minister Theresa May was singled out for her declaration that it was housebuilders “duty to build for Britain”.
One speaker explained: “That is an extraordinary way to express it. These are private companies acting for private shareholders.
“The politics around housing supply are becoming ever more urgent as the expectations around housing supply grow and grow, the politics of housing supply, not least as expressed through generation rent and the reawakening of the younger vote are politically important in driving parties forward.”
The prime minister’s announcements at the Conservative Party Conference were also scrutinised, with the much-heralded support for new council housing criticised for making little impact at just 5,000 properties a year.
Help to Buy
And the future of the Help to Buy scheme has also been much discussed since the prime minister’s announcement, but there was little expectation that the extra money would do anything other than preserve the fund until 2021.
“Help to Buy London has kicked off in some strength and going out at 40% equity loans on an expensive market means you’re soon burning through the money to provide support in equity loans and there was a real worry that it wouldn’t make it through to 2021,” said one speaker.
It was clear that all parts of the industry want to hear about the future for Help to Buy as soon as possible to enable planning to begin.
A range of options were discussed about how best to wind down the scheme, including reducing the price cap, make an income cap, limit it to only first-time buyers or reduce the equity loan.
Another possibility was recycling loan repayments back into the fund to make it self-sustaining.
“We don’t know what the future is. The key thing is how we unwind the Help to Buy scheme, although everyone is clear there should be no cliff edge,” one speaker added.
New build lending
The role of mortgage lenders was also discussed and how they could be key to solving the housing crisis.
There was praise for the improvement in the situation for borrowers looking to mortgage a new build home, with more lenders entering the market recently.
However, there was also concern that more needed to be done with more entrants supporting the growth in property building.
One speaker noted that first-time buyers were 2.7 times more likely to buy a new build property than other borrowers and so it was important to keep this source of finance open and flowing freely.
It was also suggested that Britain’s homeownership was heading towards a more European style mix, potentially approaching 50% ownership and 50% rental.
“We need to build the right homes and under the right tenure and builders need to be more innovative. There isn’t a single panacea” one speaker added.