For most young people, the prospect of ever owning a home seems perpetually out of reach. With the average house costing over 75% more (in real terms) than 10 years ago, is it any surprise that young people are not optimistic about their chance to own a home?
Ultimately, this leaves young people stuck in exploitative rent contracts , being charged ever-increasing rent and holding back Britain. And this is getting worse. Conservative, Labour and Coalition governments failed to build enough homes for decades, and we live with the consequences. Skyrocketing rents, ever more unaffordable house prices, and an unprecedented cost of living crisis have left millions, especially young people, feeling completely helpless. The medicine here is simple: we must build more homes.
On Monday, Michael Gove gave a speech in London on just this topic. Amongst several prescriptions, of varying practicality, to boost the UK’s housing supply, one truly radical vision stuck out.
Gove wants to see hundreds of thousands of homes built in Cambridge, more than doubling the city’s size. This ambition is laudable, but we have little faith in Gove, or the Government, to deliver it.
Economically speaking, building 250,000 homes in Cambridge is a no-brainer. The city is one of the genuinely excellent research areas of the World. Despite its small size, it rivals much bigger American and European competitor cities, producing lifesaving research from which we all benefit, not to mention a tremendous amount of tax revenue and economic growth. Indeed, between 2015 and 2020, almost $1 billion of venture capital funding was invested into Cambridge alone. That’s more than Dublin, Berlin and Barcelona combined. With this, however, comes house prices second only to London. Millions want to live in Cambridge, but only a lucky 150,000 can. If we instead opened Cambridge up to more people from around the country and the globe, we would see a huge economic boom. Britain would cement its place as a leader in science and technology, and it’s our responsibility to make it happen.
I want to make one thing clear: I do not trust this Conservative party to do this. While South Cambridgeshire’s infamous Tory MP, Anthony Browne, attacks the Liberal Democrat council for building 47,000 homes, Gove talks about his “plan” to grow this city. Throughout this, Rishi Sunak scraps housing targets and attacks Labour and the Liberal Democrats for wanting to build houses.
The real issue with the proposals is not that they would build too many homes in Cambridge, as some have suggested, but instead that, in practice, they will not build enough. The Tories have a year and change left in their government and have not the time, competence or political will to deliver on these grand plans. Words are easy; action is difficult. Local representatives are correct, too, that the Government should speak to local councillors on the ground, including the brilliant Lib Dem South Cambridgeshire, before they make such sweeping announcements. Absolutely – liberals should be attacking Gove for his implementation, but not his vision.
The first line of our party constitution states proudly that we believe in a world “…in which no one shall be enslaved by poverty”. If we cannot embrace radical solutions to the most significant challenge we face – housing – then we don’t have a hope of living up to that ambition.
* Joshan Parmar is the Young Liberals Membership Development Officer and Emma Munday is the Chair of the Cambridge University Liberal Association.
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15 Comments
Country’s on its arse, and this is the sort of thing we need to get it back up again. So many young people are completely trapped by a broken housing market, and this is precisely the level of ambition we need to free them. If God gave land to the people, why are we as Liberals not invested in making sure that that promise is fulfilled; by making sure everyone is able to live in a good home, at a fair price?
I question whether the focus should be on ‘houses’. Surely we need to be more willing to build apartment blocks of, say, no more than five stories.
………..or even storeys………
@Graham
I don’t know if you live in an apartment block – both my children did until they could afford to move to houses with gardens (one a terraced house, one a semi) as they both wanted a garden for when they had children. My point is that if we just build apartments and no terraced, semi or detached houses, we will find we create a bottleneck of families wishing to move but who can’t afford the next step, and this will mean a very restricted secondhand market for first-time buyers. A proper housing mix that reflects the demand for different types of housing is essential or we just create different types of problems in the housing market.
Canbridgeshire appears to have a particular problem with water shortages in the Fens. Cllr Lucy Nethsingha, the leader of Cambridgeshire County Council, tweeted that she was feeling “deeply angry and frustrated this morning listening to news across the networks on Gove’s proposals for a ‘super-squad’ of government planners being sent to Cambridge. “Local leaders have still been told nothing. The lack of respect for local people is breathtaking.” Lack of water mean Gove’s Cambridge plan ‘dead on arrival’ says Tory MP
Cambridge is another area where a new congestion charge has ruffled the feathers of a good number of local residents.
I know it’s so pedantic of me but I would prefer to talk about growing communities and building good quality, affordable house. I don’t want to fall into the trap of building quickly and cheaply but, for example, flammable cladding being used or avoidable tensions being brought by not having sufficient GP surgeries etc. creating too high demand for what is currently there.
Fixing this issue takes a commitment and investment which the Tories don’t want and Labour are currently chasing the Tory votes so don’t want it either.
The aspect that Lib Dems tend to ignore, re the housing question, is in the application of what used to be termed monetarist economics, and later, neoliberal economics in the regulation of the wider economy. In the period following the 2008 GFC, interest rates were held at pretty close to 0%. It is hardly surprising, therefore, that lots of money was borrowed to put into the housing market which pushed prices ever upwards.
A neoliberal economist might argue that rising property prices encourages more housebuilding which then brings property prices back down again. This obviously hasn’t happened and, furthermore, the Government doesn’t want it to happen. Property is the collateral for the majority of bank loans. Take that away and the whole financial system would collapse big time. This was the worry during the Covid lockdown. The government then took various measures to keep the property market buoyant.
They’ve got an even bigger problem now they have pushed interest rates up as a counter inflation measure. If the majority of recent buyers end up with negative net equity the economy will again be in big trouble. The government will intervene when necessary. They will do what it takes to prevent that happening. They don’t have much choice.
There is no chance of any government formed from any of the major parties: Con, LibDem, or Labour, engaging in a substantial house building program with the intention of inducing falling prices. Politicians might say they will, but the reality is they will not be allowed to.
Nominal House price inflation can be somewhat illusory. The main period of increase in real terms occurred from 1997 to 2007 Real UK House Prices since 1975. A commonly used metric is the house prices to earnings ratio. This ratio peaked at close to 5 times earnings in 1989 throwing many mortgage holders into negative equity. The ratio fell below 3 by 1996 but had climbed back to 6.4 just before the financial crisis when bank base rate was at 5%. It has recently been over 7 with wide regional variations between London and SE compared to the North UK House Price to income ratio and affordability and may fall back somewhat this year with Nationwide reporting that prices are falling at the sharpest rate for 14 yearsUK house prices fall at sharpest rate for 14 years
The UK’s distorted housing market has a heavy deadweight effect on productive investment and productivity growth and is the greatest source of inequality in the country. A shift from an excessive tax burden on earned incomes and basic consumption of necessities to a greater reliance on Land Value Tax and taxation of other economic rents (including mortgage interest) to fund public services and housing benefit is urgently needed.
An abstract “Let’s double the size of Cambridge” ambition from Michael Gove without dealing with all the fundamentals of which water supply is just one is simply a headline grabbing pipe dream, doomed to failure.
I would strongly advise any Lib Dem when faced with any such Conservative garbage to simply ask themselves “What could go wrong?” If you can’t come up with a list of 10 things in an hour, ask a few friends to help you.
This affordable and own your own house keeps the banks happy and people worrying about where the money will come from to pay it.Is it not time for a complete change of emphasis? Modular houses can be built WITH brick looking structure (the obsession with having brick built has to change ) They can be put up within a day.Surely our cllrs can be creative with construction.
The infrastructure will be needed in Cambridge for these new homes (reservoir, hospital etc)Maisonettes (ground floor flats,with 2 storeys above for living and sleeping) could be built taking less space.As owning you own house is under threat the council could build them FOR RENT.No deposit needed,straight in,an incentive to attract the young,In the future negotiations can be done re buying or remain renting or move on to buying a house later in life.The housing problem will not be solved if there is no innovation
Spoken like two young people who will pass quickly through Cambridge and not have to live with the infrastructure problems that dumping 25,000 more dwellings on an already massively overcrowded and cracking mediaeval city centre will create. As for why Cambridge”, the “Cambridge is innovative: more Cambridge = more innovation” is up there for Dimwitted Simplistic Notion of the Era alongside with Blair’s “graduates earn more; if we make more graduates there’ll be more wealth”, which is busy beggaring so many young people and turning education into a CV bidding war where no-one gets looked at without a First or a Masters. Nuts. Just nuts.
Our planning system is hopelessly inadequate because local plans are entirely about identifying sites for building housing and workplaces. Proper planning would include infrastructure of all kinds, sustainability of all kinds, public services of all kinds and community facilities. The sacred cow of green belt, needs to be at least modified and put alongside the principle that everyone should live within reasonable walking distance of green public space; that means sometimes it is better to build on green belt than on the only green space adjacent to existing housing. Sometimes it is better to build more densely in order to more easily provide public services and to allow for nearby green spaces. There are so many important factors that a better local planning system is long overdue.
@nigel – proper planning requires investment and level heads. Milton Keynes is a good example of what is achievable with a properly funded and empowered development corporation can do; additionally, it is a good example of what happens after government winds up the development corporation and leaves things to the market – most of the new development has been about maximising profits or developers rather than building an environment for real people.
Not saying MK got it right- in some ways it is a product of the car obsessed 1960s, however, it does show just how much infrastructure has to go in first; something that isn’t happening around Cambridge or along the still incomplete Varsity line…
” Economically speaking, building 250,000 homes in Cambridge is a no-brainer. The city is one of the genuinely excellent research areas of the World.”
Myopic thinking, but from my experience to be expected…
There are other excellent research institutions across the country, who would, if given the chance would probably out perform Oxbridge, if the government invested and helped promote them…
If we could abolish the buy your own home mantra and focused on building and regulating houses for rent properly this issue would be easier to solve. A property is to live in and raise a family, not an investment opportunity. If this means building more properties in the public sector and curtailing speculative land purchases and private developments so be it.