Housing

Is there anyone left who thinks the Government's Help to Buy scheme is a good idea? This week's Spectator splashes on the risks of this property bubble wheeze. Merryn Somerset Webb warns that the scheme, which underwrites mortgages, will lead to rising house prices. She argues that 'if anyone other than the government manipulated a market to this extent, it would be illegal': The latest is the one that worries even the king of stimulus himself, Sir Mervyn King.

Nick Clegg is frustrated. He told callers on LBC this morning that 'one of the most frustrating dilemmas that we have face in government is that we have thrown a barrage of initiatives at this problem to get the construction sector and house-building sector moving, it just takes longer than, I think, you or I would probably like.' He did suggest that 'we will, over the coming years, see a real step change, but where I share frustration with you is it takes so long to translate these new devices for getting house-building going into shovels and spades being put into the ground'. But what might be even more frustrating is that this 'barrage of initiatives' might not deliver the number of homes that Clegg and Co hope for, even when that 'step change' does take place.

Pity the poor Nimbys. Not only has the government's horrible new planning regime come into force, but last week we heard the pro-HS2 lobbyists describing them as 'posh people standing in the way of working-class people getting jobs'. Even Isabel blames them for wanting to preserve the idyllic views from their breakfast room window. Being a nimby is so last century. Alas, calling the naysayers nimbys simply glosses over one of the biggest problems facing our society, namely how government deals with the built environment. This has little to do with preserving greenfields, areas of outstanding natural beauty, Jerusalem - or indeed nimbyism. It is simply that building houses in the countryside inherently designs significant expense into people's lives.

Any Tories who might be asking 'What Would Thatcher Do?' about some of the political rows bubbling away today would surely wonder what her response to the current benefits debate might be. She kept well away from welfare reform, but she did have strong views on the role of government in helping people get on. Her notorious Woman's Own interview provided us with the greatest insight, and in much greater detail than the 'there's no such thing as society' line that everyone can quote. Here's a longer extract from the transcript (which you can read in full on the Margaret Thatcher Foundation website): 'I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government's job to cope with it!

One of the big measures in today's Budget was the Help to Buy scheme. It answers two demands: the first for the Tories to continue to support home ownership as what George Osborne called 'the most human of aspirations', and the second for the government to do everything it can to get construction moving again. But there's an interesting political point here. In the summer, George Osborne frightened the living daylights out of Eric Pickles and his team at the Communities and Local Government department by putting it about that he wanted further relaxations on planning regulations to encourage economic growth through construction.

The long period of dormancy for Britain’s housing market looks as if it is coming to an end — though there are huge regional differences. Central London remains exceptional, with the influx of overseas buyers into Kensington, Chelsea and adjoining neighbourhoods creating a microclimate of surging prices that has little to do with economic fundamentals — and has the political left salivating at the thought of a ‘mansion tax’ on properties worth £2 million-plus, even if that means turfing elderly widows out of family homes. Some five years on from the financial crisis that brought many lenders and house-builders to their knees, there are signs of a broadly based recovery.

MPs are debating that Cut With the Awkward Name, the Under-occupation of Social Housing: Housing Benefit Entitlement, also known by its opponents as the 'bedroom tax', this afternoon. I've already posted about some of the problems that this policy might throw up, however well-intentioned, but there's also an important political point here. When I talk to Tory MPs about this cut, some of them accept that there are problems with specific cases, and with the number of smaller homes that are actually available for people to move into (interestingly, one housing association has reclassified its properties so tenants can avoid being eligible for the cut), but what exercises them more is that the Coalition's spinning machine hasn't really moved at all on this cut.

The Government is expected to raise around £550 billion in tax revenue this financial year. The Centre for Policy Studies estimates that a mansion tax (of £20,000 on properties of £2 million), would raise at most £1 billion, less than 0.2 per cent of revenue. The tax is, however, likely to weaken the market and reduce prices – reducing receipts from other taxes; so even the CPS’s static analysis is probably optimistic. This proposed tax would be a huge burden on those forced to pay. The rate is not 1 per cent of the property’s value. The standard lifetime of a lease on a new build is 125 years, over which time the government will have confiscated 125 per cent of the value of a £2 million property.

The Welfare Benefits Uprating Bill returns to the Commons this afternoon for committee and remaining stages. As I reported last week, rebel backbench Lib Dems, the Labour front bench team and Green MP Caroline Lucas have tabled a number of amendments to the legislation to change the uprating itself, which may provoke heated exchanges on the floor of the House but little more. But there is one more amendment for discussion which, even if it doesn't get accepted this afternoon, could well reappear in the House of Lords.