The weather outside is frightful – A new starter home would be delightful

So this weekend some of us will see our first snow of the season. Harsh weather, Christmas adverts and winter generally tends to engender strong affection for home. 

It is a natural survival thing, which drives us to seek warmth and security for our families and ourselves. 

That sense of home may of course be achieved across the tenures and much discussion on these pages has highlighted the strength of the built to let model in providing high quality long term homes in the private rented sector. 

The housing association sector provides the same long term security and quality of management for its tenants.

However, it is the owner occupied sector that preoccupies the current Government; a sector that has, proportionally, been in decline over the last decade.  

The housing minister appears, probably quite sensibly, to be having cold feet on a target, intimated at the party conference in September, of one million new homes in the next five years. However the Government retains a stated goal to increase owner occupation.

This includes a commitment to deliver a series of pleasing round numbers: 200,000 new starter homes by 2020. The plan is that these homes will be sold to first-time buyers under the age of 40 at a 20% discount on market prices for no more than £450,000 in London and £250,000 in the rest of England. 

The (considerable) detail of the plan is still being thrashed out in the parliamentary process, including how these discounts will be funded and the impact on other forms of affordable housing such as Social Rent or Shared Ownership. 

There is also the issue of the ‘affordability’ of the price thresholds. Meanwhile the autumn has also seen an agreement reached with the National Housing Federation to extend the Right to Buy to housing association tenants from 2016. 

The increased level of home ownership anticipated through these policies has political logic. Comments previously made in this column have acknowledged the inherent drive towards home ownership in the UK. 

While we may feel this is part of our culture, this culture has in large part been framed by past generations preoccupied by getting on the proverbial ladder; that is a financial or investment ladder. 

The irony of course, is that if the Government were to achieve the goal of a substantive increase in housing supply, the long standing UK housing ladder would look increasing less ladder-like. Addressing the supply – demand imbalance in the UK would temper prices and the investment value of the underlying asset. 

While some areas where a significant increase in supply is already planned, or on the table, price moderation may soon become a reality, at least in the short to medium term. 

However, we can be ‘comforted’ (if homeowners) that it appears very unlikely we will achieve market-changing levels of increased supply anytime soon. 

Many local planning committees continue to capitulate to their home-endowed electorate over the perceived horror of development, while the Planning Inspectorate struggle to keep pace with the planning decisions kicked down the road by the aforementioned committees. 

It is no surprise then that the RICS reported the number of new homes listed for sale fell again in September, marking thirteen months of decline out of the last fourteen. Clearly the delivery of substantive numbers of new homes would provide a degree of activity to a dormant market.

It would also provide a welcome home for many who may have spent years saving for a deposit. A starter home, with or without a fire and chestnuts roasting, will inevitably appear delightful to a young couple. 

However, as children grow and the booty of Christmas’ future amasses, frightful may become more apt description of that same home. But, in a market where few are moving what are the options?

In order to deliver the efficient use of our precious housing stock genuine turnover is necessary. It is also needed to ensure mobility of labour, which is so essential to our economic wellbeing. 

This demands action across the market. This includes a review of the operation of the distorting cap placed on some markets by the higher rate of Stamp Duty as well as exciting and practical options for older households as discussed in my previous column.

Perhaps housing policy should take its cues from the Christmas adverts now hitting the screens. The successful take a big picture approach, encompass the young to the old, and invariably include a variation on the family house. 

That said, I would have reservations about housing policies involving sheds on the moon.

*Sue Foxley is Research Director of ThinkBarn