The state of UK housing is going to be one of the major issues of debate in the run up to the general election but it is good for the market when consensus emerges. It does not respond well to stop/start policies. The length of the planning and building process and complexity of logistics make this an industry that has to work with long-term time horizons.
So if a government was to slam on the brakes, this potentially leaves builders high and dry, with no option but to cut costs and development plans. Equally, if a government decides to press the accelerator, do not be surprised to see building firms take a little time to respond. They do not want to invest in fixed costs and infrastructure if they believe the prevailing wind could change in a matter of months.
This time around, a consensus among political parties might mean long-term plans can be put in place. We ought to have a national 10-year plan for housing, taking the politics out of the market and letting everyone plan for the future with some certainty. There seems to be broad agreement on the problems and solutions, certainly enough to agree a core programme.
There have been a number of reports published recently from the likes of the CBI, the CML, Shelter and ourselves, about what needs to be done to solve Britain’s housing problem. The most recent addition is the excellent Report of the Lloyds Banking Group Commission on Housing. Let’s hope our politicians are reading these too.
Stephen Smith is director of the Legal & General Mortgage Club