Young Voters Ranked Housing Costs Higher Than Crime in the 2015 Election

A number of issues ranked as important for UK 2015 voters under age 25. Housing made the “top 4” as affordability is not possible for many of them.

 

The Labour Party’s Ed Miliband made a strong pitch for more housing in the lead up to the May 2015 election. He proposed various schemes, including a housebuilding programme that would add 200,000 homes in the first year of his government and one million homes by the end of his first term.

 

As with all election promises, it was a clear play for votes and in particular the support of certain sectors of the electorate. Young people were his targets, as a survey by Radio 1 Newsbeat of 18- to 24-year-old potential voters indicated that housing was high on their list of concerns. While in retrospect this didn’t determine the election outcome ­– other concerns were more pressing, it seems – it nonetheless brought front and centre the need for both private and public efforts to increase the country’s housing inventory.

 

What the survey said was that housing was a priority concern for about a quarter (23%) of voters this age, trailing an improvement of the NHS (42%), “keeping down everyday costs” (33%) and education (24%). Housing ranked higher in priority than crime (14%).

 

While not their top priority, it’s understandable that housing would play an upper-tier role in what’s on younger voters’ minds. Rents are already high and university student housing is so lucrative for owners it now draws financing from the large institutional investors. The number of people receiving housing subsidies is on the rise, a mirroring of the cost of rent and the large numbers of flats now owned and managed by private landlords. Private homebuilders are increasing their output, aided by the investments of strategic land developers, but the increase is not yet sufficient to fully satisfy the growing population of the country.

 

The net effect of all this is how younger workers – those under the age of 40 – are finding it increasingly difficult to get on the property ladder. They’re working hard, but their slow wage increases, school debts and high rents conspire to make that first home-purchase step out of reach. From that, they fail to begin accumulating that all-important capital asset known as a home. The negative impact of that might be seen forty years hence when renters lack the property equity that their parents enjoyed.

 

But back to Miliband’s promises and strategy: did the youth vote turn out in his favour? Records show that in 2010 the age 18 to 24 year old cohort had a 44% turnout to cast votes, but in 2015 about 58% of the age cohort turned up. This still compares to a 76% turnout for people aged 65 and older and an across-the-board turnout of 65%. This gap between younger and older voters has grown steadily since 1970. Analysts tie the Government’s absolute protection of the state pension and other seniors-friendly legislation to this imbalance against the slow response to the housing shortage.

 

The Government has implemented several programs to encourage the building of new homes, including the Help to Buy scheme, which has been partially effective at breaking the house building logjam. This has provided impetus for private investors, such as those who participate in real asset funds, to bring more capital to the sector. The relatively quick returns on investment make this appealing to many with the money to invest.

 

In 2014, David Cameron also pledged a 20%-below-market rate plan for buyers under age 40, pegged to homes built on brownfield land – indicating a strong interest in avoiding the controversies around greenfield land building. But he then (in 2015) took it to an initiative in what’s called the Starter Homes scheme. The country’s house builders welcomed it as did many local councils which exempted builders and buyers from the average £15,000 per home in Section 106 tariffs and affordable tariff contributions.

 

So already the elevation of housing in the election to a national discussion seems to have instigated progress for people who want to buy their first homes.

 

Investing in UK land and the housing sector can yield respectable returns. But investors need to consider such investments in relation to broader financial goals and engagements. Consult an individual financial advisor to consider the investment with objectivity.