Labour is breaking its home-ownership promise to the young. What will the Conservatives offer?

Frédéric Bastiat, the French economist, wrote eloquently about “that which is seen, and that which is not seen”. The jobs saved or created by subsidies or tariffs or some other state intervention can be seen – while the costs are widely dispersed and the jobs destroyed as a result can not be so specifically identified. I think the same mistake can be made about votes – especially over development. The email inbox of a politician fills up with furious threats not to vote for him if some particular proposal for new homes is allowed to proceed with his approval. So he opposes the development, piously declaring he has a duty to “represent the wishes of his constituents.” Those disgruntled by the cost of renting or buying a home due to the housing shortage could hardly be expected to write in support of any and every proposed development across the town of city where they live. But that does not mean that they won’t use their votes.

At the General Election last year, the Labour Party did best at spotting this. Its Manifesto declared:

“The dream of homeownership is now out of reach for too many young people. The Conservatives have failed to act even though the housing crisis is well known to be one of the country’s biggest barriers to growth. Labour will get Britain building again, creating jobs across England, with 1.5 million new homes over the next parliament.” 

That promise has pretty much already been abandoned. In her “Spring Statement”, the Chancellor said:

“The planning system that we inherited was far too slow. The OBR has concluded that our reforms will lead to house building reaching a 40-year high, with 305,000 homes a year by the end of the forecast period. Changes to the national planning policy framework alone will help build over 1.3 million homes in the UK over the next five years, taking us within touching distance of delivering our manifesto promise to build 1.5 million homes in England in this Parliament.”

But the OBR talked about the UK, not England:

“From a 12-year low in 2025-26, net additions to the UK housing stock are forecast to reach 305,000 a year by the end of the decade. From 2025-26 to 2029-30, we project around 1.3 million cumulative net additions to the housing stock.”

So that probably knocks off around 150,000.

Also a Parliament starts at a General Election. Let us be generous to the Labour Party and assume their promise of 1.5 million new homes was based on this Parliament being a full five years. This means the promise applies to building from July 2024 to July 2029. If in the first year we only have, say, 200,000 new homes built, then the other four years would have to average 325,000 for the promise of 1.5 million to be kept.

More to the point is that there is no prospect that “the dream of homeownership” will be any less “out of reach” over the next four years than it is now, because the OBR adds:

“The average house price in the UK is expected to rise over the forecast from around £265,000 in the final quarter of 2024, to around £295,000 in 2029. House prices rose at
an annual rate of 3.9 per cent in the final quarter of 2024, 0.9 percentage points higher than in our October forecast. We expect this momentum to ease over the year as higher
interest rates continue to weigh on demand. House price growth is 2.8 per cent in 2025 and averages 2.5 per cent thereafter, broadly in line with growth in nominal earnings.”

Of course, OBR forecasts tend to be wildly out. Guido Fawkes has noted that it is staffed by a bunch of Leftists from the Resolution Foundation who thus have a particular set of flawed assumptions. For instance, the impact of tax changes on behaviour is often understated. Henry Hill is more kind – pointing out that the OBR “is legally obliged to take the government at its word.” Well that is bound to lead it astray. If it assumes the Government will achieve what it claims on planning reforms and the reality is more fudged then the number of new homes will be even lower.

In some ways the Government is making the chances of building homes worse. By abandoning the pursuit of beauty, the resistance to development will understandably be increased. We also have them pushing for higher ratios of social housing, reducing the viability of building anything at all. Then there is Labour’s broader war on the private sector, with higher taxes, which punishes the construction industry along with the rest of the economy.

While Labour is right to liberalise the planning system, even there the reforms are much too timid. One misunderstanding is that once planning permission has been given that it is the developer who is to blame for further delay, various conspiracy theories about capitalist “land banking” follow. But usually, the problem is that planning permission hasn’t really been given. The “major decision” might have been. The snag is that once the cheering dies down it turns out that “no development shall commence until” a requirement for a strategy for this, an assessment of that, a scheme for something else, have all been approved. Which maybe they won’t be. Or if they are, there will be years of very costly delay. Far from the investors profiting from the delay and uncertainty the exasperating process prompts them to look for projects elsewhere.

The Town and Country Planning Act of 1947 should be repealed. The “Green Belt” should be abolished. The general presumption should be that you can build houses on your land. What of the shortage of builders, electricians and plumbers? That could be solved with robust welfare reform and scrapping the “Mickey Mouse” college courses thus making proper jobs normal again.

Far more state land should be released for development. A press release from the Ministry of Defence announces:

“Thousands of new homes will be unlocked on surplus public defence land to speed up the delivery of housing for hard-working people and families, thanks to a new taskforce to remove the blockers, build homes and turbocharge economic growth. Alongside a pioneering new Network Rail property company, which will see a further 40,000 homes built, supporting delivery of building 1.5 million homes, as set out in the Plan for Change.”

40,000 is better than nothing. But given the amount of public sector land we should be adding a couple of noughts on to the end of that figure.

The big picture that emerges from all this minutia of OBR forecasts and planning tinkering is that the housing shortage is likely to get worse rather than better. The message will go forth to the aspirational British youth that if they wish to become homeowners they should emigrate.

How should the Conservatives respond? By being Conservative and championing the cause of homeownership, free enterprise and the family. We do not need to convert people to Conservatism – though that is always a noble endeavour. We simply need to persuade Conservatives to vote for the Conservative Party. Often a choice is presented between “tacking to the right” to win back those who voted for Reform UK or abstained last year or “shifting to the centre ground” to chase Labour and Lib Dem voters. Yet those young (and youngish) voters who switched to Labour out of a desire to get on the housing ladder were perversely reflecting the most quintessential of Conservative ambitions. We can already see that Labour will let them down. But will we develop a bold enough, authentically Conservative offer to win them back?