Time for the States to get to grips with housing

FOR some time, housing fell off the political agenda.

Not in a bad way – indeed, it was quite the opposite.

The formation of the Guernsey Housing Association did much to quash the topic as an issue.

All the time though, private sector housing has been becoming increasingly unaffordable, costs rising multiple times compared with earnings.

Throw in the financial crisis, with mortgages becoming harder to come by, and focus began to shift back to the topic.

Tomorrow we are due to hear Treasury's response, after it was told by the States to compile a report on financial aid for first- time buyers.

It was due to report last month – it is a shame that it has taken a deputy's prompting to make it go public with where that investigation is.

First-time buyers are not a political priority, save for a deputy or two popping up now and then to talk anecdotally about the difficulties young people face.

It would be cynical to suggest this is because of the demographics of the Assembly, but there is no doubt that representation for young people is an issue.

Those lone voices are too easy to ignore, it seems, with little done so far this term save moves that actually make it harder for that section of society to get on the housing ladder – just see what is happening to mortgage interest relief. Even the temporary reduction in stamp duty aimed at first-time buyers was given precious little time to work.

In 2010 the last States also oversaw the end of the first-time buyers' grant and closure of the home loans scheme, initiatives that were allowed to become out of step with prices and which it was feared had driven them up.

The housing market may well be going through a price 'correction' that some experts have suggested will come as prices drop to reflect the new norm.

Some comfort for first-time buyers, maybe, although not for homeowners wishing to move on to free up properties – this is a nuanced issue where what is good for one section of society might be bad for another.

There is clearly some political tension in the air around this issue.

Why else would Deputy Dave Jones have used the debate on system of government changes earlier this month to launch a not-too-subtle broadside at Treasury for running his department? At the heart of that is T&R not moving quickly enough on freeing up States-owned sites for development.

The two departments were due to present a joint report to the Policy Council on a first-time buyer scheme at the end of June.

That announcement was made when Treasury reported a 11.5% drop in document duty in the first quarter, leaving the department £2.8m. short of budget at that time.

The number of transactions in the £300,000 to £399,000 bracket took a marked nosedive between the last quarter of 2014 and the first of this year, from 42 to 22. Short-term trends mean little in housing market statistics, but keep an eye on that one for the future.

Different political philosophies may well be coming into the debate – those who firmly believe the States' role begins and ends with its partial ownership schemes and those who would see more intervention.

That could be financial, with schemes to help buyers meet the cost of deposits, for example, or perhaps something much more dramatic, with government effectively becoming builders.

What has dogged this issue in the past is a piecemeal approach, which was fine when times were good but which failed to react as the economy slowed.

We do not know what this States' approach to housing is.

If it is all about working with a housing association to help the poorest, then it has come to an abrupt halt because no more land is being freed up.

Perhaps it is an unspoken philosophy to sit it out and rely on the market, but given the impact on States finances and the wider society that is a dereliction.

If it is a reliance on the supply side, then government policy is again failing.

There is a States target for the recognised number of new units that need to be built, but the private sector is not delivering.

Environment says it is giving enough permissions, but these aren't being converted into actual houses – instead of a collective shrug of the shoulders, government should be finding out why this is.

The new development plan will have a big part to play, but we know from the permissions issue that it might not just be about the opening of the gateway to development. There will be the inevitable question, too, about what type of development takes place and what price it comes onto the market at.

Perhaps the States is happy for this situation to play out and see where we end up.

It should not be if it really wants to get a grip on the demographic challenges so clearly spelled out during this term.

It has stressed the need for young people to keep the island's finances and society as a whole healthy, yet does not invest any real effort in ensuring they can afford somewhere to live and ensure they remain rooted.

In the UK there are predictions of a new 'Generation Rent', with a PwC report suggesting more than half of 20 to 39-year-olds will be renting by 2025, but without the reassurances that exist on the Continent of long-term tenancies and quality accommodation.

Is this where the States sees Guernsey also going – and is that a future that will ensure the island thrives?

At the moment we simply do not know.

It is time the silence was over and there was a comprehensive look at the issue – including the environmental and social impacts of whatever path we are going down.