In this week's blog, as the election draws closer and continues to dominate the headlines, and maintaining our completely non-partisan stance as always, we have chosen to have a closer look at three of the running parties' commitments on housing, both in terms of their manifesto promises and their prioritisation of the challenges we face. This is particularly relevant to our sector, which provides intermediation between an investment class and an active consumer lending market, but at its core sits, as always, housing.

Starting with the Government, the core promise is building more homes, focusing on Brownfield Development as a potential solution, but with no real deep dive into on what cost basis these Brownfield sites could be developed. To have a closer look, there is a capacity reportedly to build 1.2mil homes on the entirety of our post-industrial heritage; indeed, most of the character of regenerated Northern cities has risen from the crumbling red-bricked remnants of Lowry-esq mill-scapes; however, is there a case to be made that the low hanging fruit for this kind of urban renewal has already been plucked from the tree?

These schemes, famous from the 1990s onwards, contain huge cost risks due to the nature of dealing with contaminated land and the legal consequence of getting it wrong. The idea of hiving off funds from the public purse to be delivered directly into this type of regeneration is something that has been tried and tested in the past with only a modicum of success. The process is slow, the cogs of the legal system are not designed for speed, and housing provision in this manner may not only need a massive amount of investment but a complete rethink of the legal framework around insurance and protections to developers & investors.

The second and perhaps most noticeable manifesto promise from the government was to permanently waive stamp duty tax for first-time buyers of properties costing up to £425,000. This threshold was temporarily raised and will revert to £300,000 in March 2025. This is an encouraging step, but it needs to be balanced against unit production; the danger in stimulating the buy side of a supply squeeze is inadvertently increasing house prices and rents far too quickly; there is a fine line between growth and demand destruction.

Moving onto Labour, much of muchness with similar buy-side stimulus schemes accept with a focus on deposits for first-time buyers, essentially increasing leverage through mortgage innovation. These routes have been explored before; what this would look like, we don't yet know, but again, the danger with putting a twist on an old idea is that we are in a situation now where we need new ideas and fresh thinking.

The most dynamic proposal from Labour is a change in the planning system and a swing back towards substantial housing targets. Still, this time, the targets would be mandated and essentially enforced by the state. Of all the suggested housing policies, it's perhaps the most problematic and unpalatable and potentially open to the biggest pushback, but to support smaller developers, it's probably the one thing where there also needs to be a change.

In lieu of a manifesto at the point of writing, there is no accurate detail about how these changes could be brought in. Still, a common industry proposal is a simplified designation of all existing land usage, so essentially, a digital version of the Land Registry that is pre-programmed to automatically allow specific permissions in certain regions and limit others unless certain local characteristics and requirements are met. A system such as that would provide certainty at the point of application for our nation's builders and our clients; they would know before a single penny was spent if their project and idea is viable, and that alone would encourage a tenfold increase in schemes being executed. However, to put it bluntly, could a system such as that become one of the great I.T. overspends of its age? Encouragingly, Michelangelo finished the Sistine Chapel in only four short years, so with the right motivation, it could be built quickly but at an unknown cost.

Finishing with the Liberal Democrats, their approach to housing is protectionist, as you would expect, with a range of policies focused on tenants and not necessarily on the commoditised element of the housing market. Again, with all of these polices, it lacks a great deal of nuance, but the sentiment is positive if the construction and supply element of the puzzle is also addressed.

We fundamentally believe that this is a supply-driven issue. The focus should be on building more homes and embracing the businesses that support innovative ways to do that, combining the best of private and public sector investment. We believe that these types of solutions, such as what our sector offers, will rise to the forefront in due course once the war of words ends and the real work begins.

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