James Coney  

We need a housing stock reset

James Coney

James Coney

You can’t talk about the cost of living if you’re a Tory. Firstly because so many of the Conservative party can’t be trusted to say anything without putting their foot in it.

But mainly because no one wants to hear advice, even if it is straightforward and plain-speaking, from someone they think went to Eton.

It may well be the case that many people do need help learning how to shop and cook in a different way to make their incomes stretch further, but don’t touch the subject.

Leave it all to Jack Monroe.

You also can’t solve a housing crisis if you’re a Tory. And that’s because no matter what solution you come up with in the mortgage market, it won’t solve the fundamental issue over housing stock.

A Tory MP once told me about his first days as a local councillor. He was put on the planning committee. He asked the local head of the Conservatives what he should do.

“If you want to get anywhere in this party, say no to everything,” he was told.

Anyone who has ever sat through a council or parish council planning meeting will recognise this view, which brings me to the latest plan by the levelling up secretary Michael Gove to ease housing affordability: a guarantee scheme for first-time buyers. 

The riddle he is trying to solve is the familiar question posed by many young people: why is it I can afford rent but can’t get approved for a mortgage of the same amount?

There are lots of good reasons for this, not least the fact that when you are approved for a mortgage you need to show that you can afford not just at today’s rates but those in the future. And as we are learning in recent months, this is critical.

There are also lots of rules, many of which came in after the global financial crisis, governing affordability and the risk banks are allowed to take on.

These are right and proper and eminently sensible.

What Gove has suggested is a return to the mortgage indemnity guarantee, which still exists in Canada and is being used as an example of good practice.

But for those with long enough memories, the MIG used to exist here too. It died out though for good reason, one being that it just added cost to the buyer, the other being that it massively over-inflated house prices.

Of course, we already have a mortgage guarantee scheme that the Conservatives introduced during the pandemic as a way of boosting the number of 95 per cent mortgages. 

What Gove is suggesting more or less shifts the responsibility for offering these loans from the public to the private sector.