The prime minister who came closest to fixing Britain’s broken housing market

Under the bi-line From Thatcher to Sunak: who in Downing Street had the worst record on house prices? the Telegraph has published  piece with their views on the performance of different Prime Ministers in the housing market.

It can be seen here (subscription may be necessary) stating that the tenure of British Prime Ministers has often correlated with the buoyancy of the housing market during their time in office. Historical data reveals that those who presided over significant increases in house prices enjoyed longer periods in power.

Housing Market and Prime Ministers’ Tenure

  1. Margaret Thatcher (1979-1990):
    • Average Annual House Price Growth: 9.6%
    • Policies: Thatcher introduced “Right to Buy,” allowing council tenants to purchase their homes, and Mortgage Interest Relief at Source (Miras), boosting homeownership. Despite high interest rates, mortgaged home ownership increased by 3.2 million households under her leadership. However, her era saw a decline in social housing availability, with only 20% of new builds classified as “affordable” or “social”​ (Zoopla)​​ (RICS)​.
  2. Tony Blair (1997-2007):
    • Average Annual House Price Growth: 12.1%
    • Policies: Blair’s government relaxed mortgage regulations, introduced buy-to-let mortgages, and created a favorable tax environment for overseas buyers, contributing to a 218% increase in house prices during his term. This period also saw the inception of affordability issues due to the widening gap between wage growth and property prices​ (Zoopla)​​ (RICS)​.

Housing Market Performance Under Various Prime Ministers

Prime Minister Tenure Average Annual House Price Growth (%)
Margaret Thatcher 1979-1990 9.6
John Major 1990-1997 -0.3
Tony Blair 1997-2007 12.1
Gordon Brown 2007-2010 -2.9
David Cameron 2010-2016 3.2
Theresa May 2016-2019 2.1
Boris Johnson 2019-2022 2.3
Liz Truss 2022 (49 days) -9.0
Rishi Sunak 2022-present TBD

Challenges for Keir Starmer

Keir Starmer inherits a housing market in disarray, facing the worst conditions since World War II. Despite past policies aimed at boosting demand, such as Help to Buy and the stamp duty holiday, the fundamental issue remains the inadequate supply of affordable housing. Experts argue that without significant reform, including mandatory housing targets and green belt reviews, achieving meaningful improvements will be difficult​ (RICS)​​ (UK Parliament)​.

Potential Reforms and Outlook

Labour’s proposed policies include:

  • Building 1.5 million new homes over five years.
  • Reforming planning regulations and reclassifying certain green belt areas.
  • Introducing new towns and affordable housing initiatives.

These reforms aim to address the long-standing supply issues but require substantial political commitment and cross-party support to be effective. Experts believe that only radical changes can rectify the entrenched problems in the housing market​ (Zoopla)​​ (RICS)​.

The success of Starmer’s administration in the housing sector could significantly influence his tenure, as evidenced by historical precedents set by Thatcher and Blair

SEARCH

YOU MAY ALSO LIKE

Grainger reacts to Kings Speech

Grainger plc, the UK's largest listed residential landlord, has responded positively to the proposals outlined in the...

The aims of the new Chancellor

Rachel Reeves, the UK's Chancellor of the Exchequer and former junior chess champion, favours the Sicilian Defence in...

CATEGORIES
SOCIAL
Twitter feed is not available at the moment.

0 Comments

Submit a Comment