This time next week the polling stations will be open and the politicians will have taken part in the obligatory photo call on route to the ballot box. We will then have to wait until the following morning, or even later depending on the result, before the final announcement is made and the press descend upon Downing Street.
But then what will happen?
For me of course the most important part of the election campaign has been the discussions about house building and housing in general. Housing has been a key election topic.
With regards to what will happen when all the furore calms down, I don’t think much will change. None of the parties are suggesting anything radical. If anything, the pledges could be deemed to be the complete opposite of radical. On the positive side all seem to be committed to increasing the supply of new homes. Even if some of the policies being proposed, like right to buy, local first and rent control could well have the unintended consequence of reducing house building activity…
Even though we lack the strategies, the commitment to increasing housing supply is still positive for our industry. The construction industry desperately needs stability rather than the boom and bust of the past 25 years. At the moment stakeholders are still proceeding with caution, much more so than in the last two upturns meaning, long term investment is relatively limited.
As a manufacturer of building products used in 1 in 5 new houses built in the UK, I need to look 5 to 7 years into the future if I am to make any significant investment such as building additional manufacturing capacity. It is a multi-million pound decision which could take as long as 5-7 years to come to fruition. We all saw what happened in the last few cycles when manufacturers brought on new capacity in 1990/91 and again in 2007/08 just as demand rapidly fell way.
Since the end of the Second World War there have only been three upturns in house building; 1951-64, 1981-88 and 2001-07. Looking closely at these periods reveals a clear, if somewhat discouraging, pattern. Each upturn has been shorter in duration that the one before, and with a slower gradient of growth and a lower peak.
Politicians are aspiring to see housebuilding levels of 200,000 to 300,000 per annum in the next parliament. But, two thirds of the housebuilding industry surveyed by Knight Frank last week doesn’t believe we will have the conditions in place to exceed 180,000 per annum in the next parliament. The reason is simply because none of the parties are proposing any radical strategies to ramp up supply.
So why aren’t they proposing any radical change? Is it because they lack ideas? I suspect they know what needs to be done but being clear about the solutions won’t get them elected. Then even if they did get elected they wouldn’t be able to make a significant impact whilst in Government. This is because solving the housing crisis is something that will require a sustained strategy over a period of ten to 25 years, meaning that it has to happen over several five year parliaments. Secondly, the strategy will offend quite a lot of people; 75% of voters agree there is a Housing Crisis, but less than 50% think there's one where they live! A strong majority Government might be prepared to do the right thing for the long term good and upset many people along the way. But, since we are certainly not going to have a strong majority Government we are going to see lots of appeasing.
So all of the political parties are steering well clear of the elephant in the room which is to address the constraints on land supply that hold back housebuilding. They are all doing this because anyone who suggests tampering with the green belts around our cities stands accused of environmental vandalism. To add to this there is great misinformation about what greenbelt, Greenfield and brownfield really is.
Neither are we seeing any political parties proposing to use taxpayers’ money or borrow at historic low interest to invest in social housing infrastructure. Instead they are suggesting taxpayers’ money should be used to cut stamp duty, so that more buyers are chasing the same number of homes. Or they are proposing to use taxpayers’ money to subsidize the transfer of publicly owned homes into private ownership, again without increasing the overall supply of homes.
No radical change means that housebuilding should carry on much as it has done since it began to recover a couple of years ago following the implementation of the NPPF and the launch of Helptobuy. There are some downside risks that could arise depending on the influence of some of the minority parties if indeed they use their power to influence housing policies. The SNP support HelptoBuy but UKIP and the Green Party want to replace the NPPF. The Green Party also want to cancel Help to Buy and break up large builders. But on balance I think UKIP will be far more interested in immigration, the Greens on stopping fracking to use any of the aces they may get handed to use them on housing matters.