Housing has rapidly risen up the UK political agenda in the past five years and will undoubtedly continue do so in the run up to the general election in May.

In this article, we examine how the state of housing markets may already be part of the political landscape in the UK. Housing is a significant store of personal wealth; our analysis shows that the total value of UK housing stock currently stands at £5.75tn – equivalent to the combined GDP of Germany, France and Italy. It is a figure that has risen by £543bn in one year.

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Political impact

It is the way in which this value and housing growth is distributed that will influence future housing policy and, ultimately, the fate of different parts 
of the UK housing market.

It will come as little surprise 
that the total value of housing 
stock in Conservative constituencies is somewhat higher than that in Labour constituencies. In fact, it is nearly double (at £3.3tn).

This may be primarily a result of underlying and historic socio-economic conditions which have in turn determined the political colour 
of the constituency.

There is still a strong argument that 
the maintenance of a consistent housing policy is difficult when, 
on the one hand, £2.4tn or 61% of all owner occupied housing value is located in Conservative constituencies while on the other, almost half (48%) of the value of social housing is in parliamentary seats held by Labour.

Both parties will have interests in the private rented sector, where the amount and value of stock continues to rise because of a lack of accessibility to both of the other forms of tenure.

Geography also has a part to play, given the housing markets in the south have already outperformed those further north and are likely to continue to do so over the next phase of the housing market cycle.

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Election implications

In what is anticipated to be a close election, all parties will need 
to engage with stakeholders across all sectors of the housing market.

£1.62tn of housing stock is located in seats where the majority was less than 10% of the vote at the last election and the value profile in these areas almost exactly replicates that of the UK as a whole.

The pressure to have joined up housing policy towards housing delivery is particularly evident in Greater London, where the total value of housing stock is split relatively evenly between the two main parties. Here the value rose by 20% or £247bn in 2014 alone and by £563bn in five years. The resulting affordability pressures will undoubtedly come into focus over the period of the next parliament whoever holds the balance of power.

Common need to deliver

The growth of the private rented sector, the falling numbers in mortgaged owner occupation, 
the restricted amount of new social housing and the value gap between London and the rest of the country are certainly exercising policymakers across all parties. The aim must surely be to achieve a more co-ordinated, less-polarised and longer-term set of housing policies.

There is cross party consensus that more housing needs to be delivered, even if there is the disagreement as to why this is the case and what needs to be done to achieve it.

It seems inevitable policy positions on housing will be defined by the balance they seek to strike between stick and carrot, taxation and incentivisation, regulation and market-led solutions.

Hopefully the political rhetoric around these distinctions will not cloud the underlying need to deliver much more housing across the full range of tenures – particularly in the private rented sector.

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Successful policies will improve the efficiency of the use of existing stock, expand supply of all types of housing by avoiding excessive regulation and still recognise the important role of home ownership in providing households with financial security.

Taken from
Residential Property Focus Issue 1 2015