Quitting the EU will be a shock for the housing market

We will soon be introducing the Neighbourhood Planning and Infrastructure Bill to Parliament. This bill will aim to further simplify the planning system, and give more power and certainty to neighbourhood plans, as well as deal with one of the reasons we see such a long time gap between planning permission being granted and homes being built.

We know that empowering local people on local planning issues is working: it is delivering more planning permissions than ever before with figures moving up to over 263,000 permissions being granted in the last year. 

This matters, as we have not built enough homes in our country for several decades. We are living longer and we have more single occupiers, so we need more homes. Especially for young first time buyers. We also need more homes people can afford to buy, which means we need low interest rates and confidence for investors to continue to invest in our property markets in order to allow developers to buy the land and to fund the builders and housing associations who build.

Help to Buy has been a powerful part of driving up supply, as evidence has now proven, because by ensuring buyers can borrow and buy homes we see builders grow in confidence - and therefore a growth in supply. We saw house-building fall as low as 88,000 homes before Labour lost power in 2010 and we are now back up at around 180,000 homes, and we need to continue that growth to get to where we want to be. The trajectory is good and the sector itself has been clear we can do it, but - and it is a big but - we need stability. We need economic growth and we need skills, for all of this we need to remain in the EU. 

I have always described myself as a Eurosceptic, but that is very different to quitting the largest trading block in the world with 500 million customers. With skilled workers who can help build the homes we need, a market that has allowed us to become one of the fastest growing economies in the world, one which has led to our highest ever levels of employment. Why would we want to put all of that at risk?

Why create the instability that spooks investors, reduces housing supply as a result, restricts access to skilled workers, supplies and export opportunities?

Quitting will mean that our social housing sector no longer has the benefit of £2bn from the European Investment bank financing, which is hugely important to us and our Housing Associations.

The economic shock of quitting the EU will mean falling currency value and rising interest rates. That leads to a double impact of higher costs for us all in our mortgages as their cost goes up with interest rates, but also means our councils and housing associations are paying more for their loans, which means they can afford to borrow less and have to spend more on interest, which in turn will leave them less money to spend on building homes, and as such will reduce supply. This is on top of the fall in supply we will have as investors move to more stable markets. It simply does not make sense for us to take this risk. After so many years of working hard to rebuild our economy, why would we choose to wilfully see it falter?

The worry about possible Brexit is clear with the builders I speak to in my role as Housing Minister. They have been clear in going public over the last few weeks about their concerns and why they want us to remain, builders and housing associations across the sector. When this article goes live I am likely to be on a building site with a building company who have been very clear how big a risk to their investment plans quitting the EU will be. 

Crest Nicholson, along with so many others in the housing sector, are very clear about the need to remain and have that economic stability and growth because the property market is international and hence money can move away form our shores if we have instability very quickly. In fact, we are already seeing that in the last few weeks as people hold back waiting to see the outcome on June 23rd.

As I outlined elsewhere this week, what we should all be able to agree on is that for any housing supply growth of any tenure we need a stable and growing economy. Quitting the EU creates uncertainty which stops that.

I want to be able to spend the next few years focused on delivering 1m new homes – and meeting our commitment on affordable housing – for that I am convinced that the UK needs to be part of the European Union.

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