Election hype vs housing hope – what will really change?

By Jennifer Harrison, Content Lead

During his rain-soaked speech on Wednesday 22nd May, Rishi Sunak revealed that the next general election would be held in just five weeks’ time, on 4th July 2024, much sooner than many had expected. Sir Kier Starmer, Labour Party leader, described it as ‘the moment the country’s been waiting for’.

As D:Ream’s ‘Things Can Only Get Better’ – associated with the Labour Party since Sir Tony Blair’s landslide victory in 1997 - blared out throughout the PM’s speech, many of us working in the housing sector were asking the question: ‘how exactly will things get better?’

I spoke with Peter Stimson, Head of Product at MPowered Mortgages, to get his insights on how the election might impact housing and what he’d like to see from any government hoping to win with their campaign.

Do you expect the upcoming general election to have any impact on the housing market in the short-term?

In a word, no! An election has been on the cards for a long time, and nothing planned or stated by either major party is likely to have any immediate effect on the housing market or financial markets.

What do you think the mortgage market needs from a new government?

Personally, I’d say three key things:

Firstly, for the mortgage market to be left alone. All the interference with schemes like Help to Buy and shared equity should be stopped, as they aren’t really resolving what are fundamental structural issues with the market. Unless you change the imbalance between supply and demand, these schemes aren’t doing any real good or having any long-term impact.

Secondly, it’s essential we have a housing minister that lasts over a year! It was like musical chairs with the last government, and if we want an enduring plan to solve the problems facing this sector, we need a minister who is in place long enough to achieve something.

And thirdly, to talk to and listen to the industry about what needs fixing at a structural level. The problems aren’t simply about access to mortgage finance; we have a major housing crisis that's been brewing for the last 30 years, and that can only be addressed if the Government works directly with the industry. In simple terms, we need more housing of all kinds!

How do you think a new government can support the housing sector?

Two things need addressing in my opinion:

Planning! - Year upon year we’ve seen the Government’s inability to build anything approaching a reasonable amount of housing. The Town and Country Planning Act is due serious reform that instead of putting the onus on ‘why you can’t build’, reverses the emphasis to ‘you can build unless…’

Secondly, social housing provision is seriously needed, and we can’t rely on private landlords and developers to provide this. A way must be found to fund a building program that provides long-term affordable housing in significant volume, and I’m not referring to shared ownership, as that doesn’t cut it.

What challenges do you think any new government has in supporting the housing sector?

The biggest challenge is how big a mandate any incoming government thinks it has for tackling some of the major housing issues and what priority housing has on its agenda. To address the fundamental shortage of property, there is an inevitable battle with the NIMBYs and conservationists! To date, every government has steered clear of this, but it needs to be addressed.

There are of course other clear secondary issues around the skills shortage and how we fund the provision of social housing, and any government who wants to support the housing sector will need to be creative in finding solutions to these broad issues.

Housing plays a crucial part in a strong economy, both on a national and local scale, and so a transformation plan in this area is essential for whichever party wins. Be it through stamp duty reform, prioritising affordable housing, or tackling runaway renting costs, it is clear that voters are going to want to see a genuine commitment from politicians to finally resolve the housing crisis facing this country. But will any party step up to this challenge? At MPowered Mortgages, we will follow all campaigns closely and continue to share relevant updates via our Content Hub, as well as discussing the matter on our Mortgage News Live webinars, over the coming weeks.