Esther McVey speech on supply and demand side housing policy

Esther McVey, the Minister of State for Housing, has given a speech at the convention for the residential property sector outlining government policy enacted and futures plans in place to increase the supply of new homes to 300,000 per annum by the mid 2020s and assistance for extending the affordability of home purchases for First Time Buyers.

The speech shows particular government concern to use balance supply and demand to avoid the continued cyclical escalation of house prices.

RESI Convention 2019 speech: Extracts below

“Since the mid-1990s, house prices have risen to 8 times, 10 times, 12 times, in some of the most expensive parts of this country 44 times the actual income of someone, that cannot be right.

Successive Conservative governments have sought to put a lid on that escalation, helping working people get on the housing ladder so they don’t have to dip into the bank of mum and dad.

It still isn’t enough, but we have cut stamp duty for 95% of first-time buyers and abolished it altogether for 80% of them.

We’ve introduced Help to Buy, loan and ISA, helping more than half a million have the security of home ownership.

And we’ve continued the hugely successful Right to Buy which has helped generations after generations onto the housing ladder.

But there is a limit to what government can do, for example, Help to Buy is precisely that. It is helping people to buy, it is not helping somebody to make a profit, it is not helping to increase the prices of property. It is about helping people to buy.

So this government will be vigilant about what is working, keeping an eye on our goal. That is a shared goal, helping people into a home and into home ownership.

Extending ownership schemes and building the homes the country needs.

And, we’re doing that straight away, we’ve looked at ownership models, so making Shared Ownership more accessible for working families. We’ve started that already so buyers can have a staircase of 1% increases rather than 10% leaps.

We’re going to look to expand Shared Ownership, supporting it in different ways, taking out what we hear to be the difficulties of it, the expense of it. It shouldn’t be unfair for those trying to get onto the housing market.

And Rent to Buy, so people can rent knowing that they are going to buy, knowing that they’ve got a bit of breathing space, maybe it’s in 5 years, maybe it’s in 10 years, but they will get to own that property – so they can plan, knowing they have the certainty of getting a deposit and getting that house.

And Right to Build, so many places around the world have far more people building their own homes, so we’re going to be there, whether its support for Right to Buy or Right to Build.

And also supporting communities, for Communities to Build.

Because there are so many houses to build – we need to open up all of those opportunities.”

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