Grant Shapps:Property Industry Political Point Scoring

Posted on August 25, 2010 by editor
Posted in Guest Bloggers, Politics Of Property Tagged coalition, Grant Shapps, political, property industry, scoring

Grant Shapps-political point scoring Today we are introducing a guest blog from Michael Day of Integra Property Services.

Michael has broad experience in the industry having been a main board Director at Connells before setting up Integra.

He was also the inaugural chair of the RICS Residential Faculty and has a wide range of clients across the sector.

How long before the property industry falls out of love with the Tories?

We’ve now had 100 days of the new coalition Government, a Government largely welcomed into office by the property industry which is traditionally blue by political nature. However, is the property industry now in danger of becoming blue with despair?

Perhaps through fears for the lifetime of the coalition or a desire to make quick decisions in order to look decisive, the combination of Messrs Shapps and Pickles (they always sound like a vegetarian liqueur to me) have made a number of sweeping announcements and policy decisions which are already having an impact on the housing market and look set to impact even more as the fallout of their actions hits home (excuse the pun!).

HIPs Suspension

One of their first decisions was to suspend Home Information Packs (HIPs) effectively putting the penultimate nail in the coffin of a well intentioned but poorly implemented flagship Labour housing policy.

The estate agency industry largely welcomed this move although I expressed concerns that simply removing HIPs was not the elixir for a better and more active market that many were predicting. There are far too many other factors including the economy, job security and mortgage availability that affect the market more than HIPs ever would. Indeed, the entire content of a HIP is still produced as part of buying and selling, it is merely the timing and who pays that has changed.

What the abrupt removal of HIPs has contributed to is a significant increase in the supply of properties for sale from “speculative sellers” (or, in many cases “time wasters”), tipping the balance between supply and demand and accelerating a downward trend in values and confidence. This in turn will see a reduction in sale volumes, volumes that had been slowly increasing. I am not saying that HIPs are entirely to blame for these changes in conditions but their demise has made a contribution.

Planning Rules Changes

It is probably in the world of planning and new homes that the new Government’s desire for change will have an even greater impact.

Announcing a desire for local people to have more say in local planning has, and will, only increase NIMBYism. “Would you like to see more housing built next door?” “No thanks” is the almost automatic response.

Almost immediately and in an attempt to put a plaster on this wound of their own creation, an announcement was made that local planning authorities will be “bribed” to grant planning consents. In fairness, I think the words used were “incentivised” and “rewarded” but we all know what Mr Shapps meant.

Central House Building Targets

uk contruction targets Ending central and regional house building targets has, according to the National Housing Federation already seen over 85,000 planned new homes scrapped by councils across the country. They also estimate that this could see new affordable home volumes drop by 65%.

The National Federation of Builders has described the combination of Government policies as “death by 100 cuts”.

Stewart Basely, Executive Chairman of the Home Builders Federation said “Scrapping the existing system without a replacement is a recipe for disaster,”

Mr Shapps is an avid user of social media but is clearly in danger of believing his own hyperbole (bullsh*t – noun, verb). Most of his and Mr Pickles’ announcements are a combination of “look how much we are doing and how quickly” and thinly veiled attempts at giving their Labour predecessors a good kicking.

Distorted Figures

On August 19th 2010 Mr Shapps proudly announced on Twitter, and I quote: New house building is up 13% as communities start to appreciate ‘New Homes Bonus’ means sustainable building makes sense. What he omitted to say was that the figures related to a period under the last Government and were nothing to do with any actions he had instigated or is yet to instigate.

Mr Shapps has apparently now announced that he doesn’t think that the Labour view that we need 3 million new homes by 2020 was correct. If he is right, given the current lack of “joined up thinking” and hurried and seemingly scatter gun approach to housing policies, it’s probably just as well!