If you listen to the politicians in the run-up to the general election you would be forgiven for assuming we will see a flood of new builds over the next five years. We have the Labour Party and Conservatives promising 200,000 extra homes while the Liberal Democrats have gone further with a suggestion they will fund 300,000 new properties. In a normal world this flood of new properties would have an impact upon property price inflation but the reality is very different from the rhetoric.
We all know the politicians tell us what we want to hear so they can secure our vote, they often forget what they have told us and are very good at introducing excuses amid “changing circumstances”.
Historic underinvestment in new properties
Over the years all major political parties across the UK have been guilty of underinvestment in the UK property sector. The introduction of environmentally friendly regulations, a hiking of costs associated with planning permission and a reluctance to even use brownfield land are all part of the wider picture. Year after year politicians promise the introduction of light touch regulations to encourage a significant increase in the number of new builds and assistance for first-time buyers. So, where have all these promises gone?
Property is important to individuals
If you take a step back and look at your financial situation from a distance, your investment in your home will likely be the largest you will ever make in your entire life. Many people have taken on mortgage debt running into the hundreds of thousands of pounds securing their family home. Can you imagine any government flooding the market with newbuild properties which would at best reduce the growth in property price inflation and at worst have a significant impact on local markets?
This would be a surefire way to lose votes in the long-term although in the short term, with the forthcoming general election expected to be very close, it seems that political parties are yet again targeting first-time buyers.
Rhetoric not reflected in practice
If, as various political parties have suggested, there will be an increase in new builds over the life of the next Parliament why is there a need to introduce financial assistance for first-time buyers? Various schemes have been announced by the Tory party, indeed the Labour Party is broadly supportive of these going forward, which does not stack up with the rhetoric and the promise for a significant increase in new properties across the UK.
If you have an interest in the UK property market even the quickest of glimpses at historical research will show you that year-on-year the UK has underspent on newbuild properties. The UK population continues to expand, the economy continues to grow yet this trend is not reflected in the number of new properties being made available in the UK, especially to first-time buyers. This is the proof that politicians will never let the UK property market be flooded with new builds and indeed we will likely see more financial assistance for first-time buyers as a compromise solution going forward.