The topic of housing produced the strongest sentiment during a 90-minute debate dominated by the general election.
Panellists told 200 people gathered in the gleaming West End office block Fitzroy Place, W1, that the main political parties had put the country’s stability at risk by treating the housing crisis as a political football.
“I can’t see any political party in the short term, or even the long term, addressing this properly because it’s just not the way that politics works,” said Joe Twyman, YouGov’s head of political and social research.
“The politicians benefit from the fact that a certain portion of the population has done very well from increases in the value of their property.
“Building houses, on the other hand, is difficult, particularly as there is often local opposition,” he said.
Instead, Twyman told the audience that the parties would continue to concoct “mini-policies” that would have a limited effect on housing supply.
Aviva Investors managing director of European real estate Ben Stirling said the parties had to broaden their focus away from home ownership in order to unlock housing supply, and claimed that £14bn of institutional capital had been lined up to invest in the private rented sector.
Politics and property
The panel was split over which party’s victory would be more beneficial to the property industry.
Twyman said the polls showed that Labour was more trusted on housing, with 61% supporting its manifesto pledges, compared with just 28% for the Conservatives’ Right to Buy policy.
And while there was broad disapproval of Labour promises to implement rent controls and support for the Conservatives’ focus on growth, the prospect of the Tories’ EU referendum dulled enthusiasm for a Conservative victory.
Stephen Down, Savills’ head of central London investment, said: “For the first time, I think that a Labour victory might be better for business as there would be stability on the referendum point.”
Stirling, meanwhile, said the uncertainty about the outcome of the election could benefit the property industry and “take some of the more extreme policies off the table”.
Foreign investment
The panel singled out the negative portrayal of foreign investment in housing as a key risk to London’s global success.
Down warned of “political scare stories” about foreign buyers leaving their central London homes empty.
“These buyers are regenerating previously derelict areas of London. Most of the city has been transformed as a result of this partnership with foreign capital.
“The ‘lights out’ in central London is a political scare story, and we don’t see that actually happening. What isn’t occupied is usually rented, and so there is a virtuous circle of occupation and investment going on here.”
Southwark council chief executive Eleanor Kelly labelled such tactics “scaremongering”.
“The vast majority of people who are buying homes as an investment will continue to get the rent they’d want regardless of how rich they are.”
Other panel members warned that the issue may have a grounding in reality, and put at risk the social stability underpinning the city’s global success.
Youth and social stability
Amlan Roy, Credit Suisse’s head of global demographics and pension research, urged the audience to consider the housing shortage in a broader social context.
“Never before in post-war history have the top ten developed countries seen such a rise in youth unemployment. I think that both parties suffer from their inability to say how they would provide affordable real estate for the younger generation,” he said.
Twyman agreed that more attention had to be paid to the needs of younger and poorer elements of society.
“I’m not suggesting that the youth of London are going to rise up again anytime soon, but they could,” he said.
“If they perceive that the lights in London are going out, even if they’re not, if they feel they’re unable to leave home, and if the momentum for anti-establishment parties and movements grows, then London’s young people, particularly the unemployed, may decide they’re not going to take it any more.”
Tech infrastructure
The other area in which the panel perceived a threat to London’s success was technology infrastructure and politicians’ inability to keep up with changes in working patterns and occupier trends.
Citibase chief executive Steve Jude said 50% of small businesses did not want to commit to a lease longer than three years, and none would commit to longer than five years.
“The average lease in the UK was 21 years in 1991, and it’s four-and-a-half now. It’s all about flexibility. I think the big challenge is how to reflect the change in technology and globalisation in the product offered that fits the needs of small businesses,” he said.
chris.berkin@estatesgazette.com
