The government needs a lesson in housing supply and demand

Frustration is growing and the government needs to listen, writes Chris Stevenson

Boats in Milton Harbour in the town of Whitby (PA)

Residents of Whitby voting for a limit on the sale of newly built properties as second homes is one more in an increasing list of signs that the country’s housing policies are in need of urgent attention.

The poll asked if all new-build and additional housing should be restricted to full-time local occupation as a primary residence. The answer was a resounding yes, with 2,111 people voting in favour and 157 against. It might be a small sample, with Scarborough Borough Council at pains to point out that it is not binding on any organisation – including the local council – but it shows the strength of feeling about making sure that future policy reflects the current situation.

Whitby is not the first place to consider such a measure. Residents of St Ives in Cornwall voted in a referendum in 2016 on banning the construction of properties intended for use as second homes. More than 80 per cent agreed with the proposal, and that led to the introduction of a “principal-residence policy”. The port town of Fowey and the village of Mevagissey followed suit. Other councils, such as Brighton, are currently being asked to consider similar proposals.

Some parties – including researchers at the London School of Economics – have argued that the policy just pushes second-home buyers towards existing properties, and that it removes some of the incentive for companies to build houses, although proponents of the St Ives ban have argued that more time is needed to get a clear sense of the policy’s impact.

That was six years ago. That people have turned – and continue to turn – to local electoral measures shows just how little grasp a succession of governments have had of the situation. The reaction to Boris Johnson’s recently laid out plans to boost home ownership was certainly less than enthusiastic in many quarters, with proposals to get low earners on the property ladder through a “benefits to bricks” scheme dismissed as expensive and vague.

Downing Street acknowledged that the scheme, which would mean the government intervening to allow universal credit claimants to save for a deposit, would not have the desired effect in property hotspots, and Boris Johnson himself said he could not “give a cast-iron guarantee” that the Conservative manifesto pledge to build 300,000 homes a year by the middle of the decade could be achieved by “a particular year”. When asked last month if the figure might be reached in 2022, Michael Gove replied: “I don’t think we’re going to hit that target this year.”

The secretary of state for levelling up, housing and communities added: “We’re going to do everything we can in order to ensure that more of the right homes are built in the right way in the right places.”

What is clear is that if the government wants to make home ownership easier, it needs to apply joined-up thinking – and for supply to exceed demand. The average house price hit a record high of £289,099 in May, and while there are signs the market might be cooling somewhat, that still leaves ownership beyond the reach of many. There will no doubt be more instances of local residents trying to take things into their own hands until things change.