General Election 2015: Are homes where the heart of the election is?

Pledges to build millions of new dwellings, fiddling with stamp duty for first-time buyers – politicians are promising whatever they think the electorate wants to hear. Russell Lynch takes an unbiased look at the main parties’ election manifestos

Plans put forward by Ed Miliband have been met with derision by leading property figures (Getty) (Getty)

In an admittedly crowded field, rarely do politicians over-promise and under-deliver so much than when talking about housing. Weeks before the world’s financial system began to crumble in 2007, Gordon Brown took office and pledged to build 3 million homes by 2020. Nearly eight years on, just 1.1 million have been built and the number of completed UK homes remains 40 per cent below its 2006-07 high.

The 141,000 homes built in 2013-14 – the last full year for which we have figures – are hardly enough to keep pace with population growth and the 240,000 new homes a year we need, according to official estimates.

So who’s going to solve this housing crisis? Sadly nobody; experts contacted by The Independent lamented a mish-mash of big numbers and gimmicks in a market beset by deep-rooted supply problems. So is there any hope on housing from the main parties?

Labour

Ed Miliband’s pitch for the young vote is abolishing stamp duty for first-time buyers on homes worth less than £300,000 for three years. Those with sharp memories may recall Labour’s remarkably similar 2010 pledge on no stamp duty for first-time buyers on all house-purchases below £250,000 for two years.

Will this actually get more homes built, though? A rise in prices is more likely, according to Capital Economics’ property economist, Matthew Pointon. “It could lead to new buyers paying inflated prices for homes,” he says.

The “first call” for locals on half of the new homes in their area has also been met with little more than derision from the housing industry. “How are they going to measure local residency?” asks one housebuilding source. Three-year rent controls – linking rental increases to inflation – is another Labour policy likely to be popular on the doorstep, but met with scepticism by the property world. Mark Preston, chief executive of the Duke of Westminster’s property company, Grosvenor Estates, says: “Governments of all political colours have tried to look at [rent controls] and haven’t been effective.”

Labour’s mansion tax won’t get any more homes built, as the money raised has been earmarked for the NHS. The target of 200,000 homes a year built by the end of the parliament, meanwhile, is less than the 240,000 goal.

According to agent Knight Frank’s latest housebuilding report, over two thirds of UK firms believe delivering more than 180,000 new homes a year is unachievable under current market conditions. Labour’s “use it or lose it” rhetoric against housebuilders sitting on land also sits oddly with Knight Frank, which reports more than 80 per cent of housebuilders want more resources spent on local planning departments to speed things up; it’s by far their biggest demand.

David Cameron’s ‘right-to-buy’ extension scheme has already bombed (Getty)

Conservatives

David Cameron’s main policy – the extension of Margaret Thatcher’s right-to-buy dream to around 1.3 million housing association tenants – has already bombed and it’s been heard of very little since a fanfare two weeks ago.

Big discounts to tenants – a maximum of £77,900 across England and £103,900 in London – will be paid for by councils selling off their most expensive homes, although they will replace those sold on a one-for-one basis, the Tories say. That seems unlikely, as councils in England have only replaced a third of the public housing sold off since 2010.

Again, Mr Pointon is critical: “You’re helping a very small number of people who are already in a very secure tenure,” he says.

The Tories also plan to sell 200,000 “starter” homes at a 20 per cent discount, funded by lower Section 106 payments to councils by builders for affordable housing. Industry insiders say the sums don’t add up, and that the Section 106 savings could be far less than the £15,000 anticipated to pay for the discounts. Help-to-buy Isas meanwhile – allowing a potential £3,000 top-up on £12,000 of savings – are seen as little more than a gimmick and of no use at all for the expensive London market.

What the industry does like is the Tories’ commitment, made last year, to extend the first part of the help-to-buy scheme, which kick-started the housing market back in 2013. The government would provide deposit loans for the next five years. “This is one area where we’ve had silence so far from Labour,” says a senior housebuilder.

Natalie Bennett will use taxes on landlords to build homes (Getty) (Getty Images)

The rest

The smaller parties – unlikely to be burdened by the prospect of delivery – are throwing around even larger numbers than the big beasts. The Liberal Democrats are saying that they’ll build 300,000 homes a year and bring forward at least 10 new garden cities in England, as well as direct government commissioning of private housebuilding to ensure houses are built quickly.

The Greens, meanwhile, are making a big pitch for Labour votes, looking to out-Miliband Miliband. They want to build half a million new social homes by 2020, paying for it with higher taxes on landlords. They also want caps on rent increases and five-year tenancies. Ukip wants a “brownfield revolution”, cutting stamp duty and VAT to encourage 1 million more homes on previously used land by 2025.

* When the dust settles after 7 May, the industry will want to see the small print on the myriad schemes from whoever forms the government, as well as some hard yards covered on thornier problems such as planning. Unsurprisingly Mr Preston – whose company has been around for more than 300 years – is keener to look to the horizon. “I think we need a good step back and an objective long-term view in looking at this housing problem, and maintaining economic competitiveness. Planning is still clearly an obstacle, but there are still skills shortages and materials shortages preventing the supply side bringing things through. All those areas need addressing.” Then, perhaps, a political party might actually be able to make good their promises on housing.