How much longer can the housing crisis last?

• What the people actually want, they can’t even vote for
• Housing and immigration are about to upend British politics
• It’s time to invest and uninvest in these trends, now

Having a two-party system gives the political class a hidden power. They can collectively decide which political issues are genuinely up for debate… and which are not to be mentioned. The housing crisis is certainly not for discussion. Even if it is the giant woolly mammoth in the room.

Instead, we focus on tiny tax cuts, the details of net zero subsidies, how many diversity consultants should work for the NHS and the right level for the child benefits threshold.

It’s not like these things don’t matter. Even if they sound like scraps off the politicians’ table to me.

But how far down the list of priorities are those questions for people across the UK?

So, why are they top of the political debate amongst our politicians? Not to mention the media that seems to serve them.

And what about the issues that really are at the top of the list for voters?

There is not much daylight between the parties as it is. But on the topics that really do matter to voters, there isn’t any. And when it comes to the policies that they are likely to actually implement if elected, they seem indistinguishable. That’s how the debate is shut down in a two-party system.

My question today is how far that rubber band can stretch before it snaps.

How long can political narrative control keep the real issues off the ballot at election time?

Our political representatives are supposed to be quite responsive to our concerns. We vote them in, after all. Not that we always have much choice.

So how long can political leaders deliberately ignore our wishes by way of omission?

This issue pops up on political committees too. Whoever controls the agenda can indirectly control the outcome. But, eventually, that sort of manipulation only undermines the committee itself. The question is when it loses all credibility.

Investigations into Covid-era policies have been given rather carefully chosen remits and mandates. Whenever things get interesting, they are deemed outside the scope of the inquiry. But people are beginning to question the inquiry itself.

State broadcasters and heavily ideological media organisations do the same thing our politicians are doing. By denying debanking is even an issue, they control the narrative. But, eventually, it’s only going to make them look so out of touch that nobody watches.

Those dealing with the post office scandal discovered that court cases and political investigations don’t really matter to the public. But a television show lifted the lid and turned an IT issue into a national political scandal.

It took Nigel Farage a rather long time to achieve Brexit. After decades of mutual sidestepping on the biggest issue in British politics, the Conservatives were eventually the ones forced to put the referendum on the ballot.

And then forced to actually hold the referendum.

And then forced to actually implement Brexit too. All thanks to pressure from Nigel’s political parties each time. The rubber band almost snapped three times. But Brexit got done in the end.

When political patience runs out, someone gets hurt

The trouble with politicians ignoring people’s political will is that they can begin to turn against the system itself. Or even against the politicians themselves. When a rubber band snaps, someone usually gets hurt.

Indeed, every time I hear a politician complaining about the threats they received from the public, I wonder whether they might want to ponder why. It’s not like those people were making the threats before. What changed?

A viral video featuring an Australian Greens politician suggests we’re close to a rubber band snapping on the issue of housing. He reckons the existing political parties are in for a big surprise this year. Their inability to put genuine housing policy changes on the ballot is going to have consequences.

It’s no surprise why. Shelter is rather important. And if people believe it’s the government’s job to provide shelter, they believe the government has failed, miserably.

Things are so desperate at this point that the topic has become the sole political priority for a large enough cohort of voters to matter. Parties will be able to gain traction by offering genuine solutions. Or what looks like a genuine solution…

Of course, the reason we’re in this housing mess is because of policies that constrain housing supply in the first place. All the government really needs to do is get out of the way and allow houses to be built.

But, in the political world, all problems come from the private sector and all solutions come from the government. And they call me extreme for suggesting the opposite!

The immigrants didn’t build their Trojan horse. We did.

I know some of you will argue this isn’t about housing policy at all. It’s about immigration. But that only brings me to the very same argument. The political class is carefully avoiding the sort of policy that offers voters a choice there too.

It’s not like one party is pro-immigration and the other party anti-immigration. Neither party is credibly going to cut immigration in the dramatic fashion that voters would actually vote for. In proportion to the size of the immigration issue, their policies are barely separable.

In Scandinavian countries, and elsewhere, we’ve seen where this can lead. Anti-migrant parties can gain control.

Indeed, the UK is far from the only country facing this issue. And a bit more international comparison will highlight the point we’re at.

While discussing this same topic amongst the editorial team in Australia, my friend and mentor Greg Canavan wrote this:

The enemy is NOT the people coming here for a better life. They’re just as screwed as the rest of us trying to raise a family and buy a house.

The enemy is the political class who have turned these taps on knowing it will boost headline growth and demand, while taking no responsibility for the massive structural changes occurring in our economy and society.

Greg also linked to an article in the Australian Financial Review newspaper which does a rather dangerously good job of explaining just how the rental crisis is pushing people off a cliff Down Under:

More than 800,000 renting households across the country could be priced out of their current suburbs, displaced by wealthier tenants who are themselves moving into more affordable areas as rents soar to new highs, new data shows.

Analysis by Kent Lardner, director of Suburbtrends also finds that those in the lowest socio-economic groups, represented by over 150,000 households – are bearing the heaviest burden.

It reminds me of the energy crisis. European households faced eye-watering energy prices because of their government’s stupid energy policies. But that was the price of buying up enough coal and gas to fire up the old generators. The real consequences were faced in places like Pakistan, which had their gas bought out from underneath them. They simply went without.

The wealthy can buy their way out of the trouble they caused. The poor cannot.

To be perfectly honest, this is my primary motivation for getting up in the morning. Making sure my family have enough money to deal with any mistakes I make. If I book the hotel for the wrong month, again, I want to have enough money to rescue the holiday.

It’s those struggling that can’t afford a backstop when things go wrong. They bear the consequences of poor government policy, rather than losing a bit of money. And, right now, poor government policy is hammering them on all sorts of issues. Inflation, taxation, childcare costs and so much more. But, unsurprisingly, housing is number one. That’s why I think it’s the rubber band that’ll snap first. It’s where we need to keep our eye on to anticipate changes in political trends.

What will that look like? A political party that actually claims it really will solve the problem. And not in a vague way. There will be no tinkering this time.

A risky time to be a property investor

Some in the Labour Party have already proposed compulsory acquisition. The only thing better than buying property on the cheap is forcing someone to sell it to you. That’s the sort of thing I think investors need to begin worrying about in coming years.

Just as UKIP and the Brexit Party forced the Conservatives into a pro-Brexit position, similar pressures might soon come to bear on housing policy. And that won’t be good for property investors.

Once again, the irony will be that it’s investors who provide the housing. But that won’t matter to those calling for government intervention. They don’t think in terms of creation, only redistribution.

Anyway, just because housing is not top of the political agenda today doesn’t mean it won’t dominate political discourse tomorrow. The balloon is being held under water by both political parties. But that’s not sustainable.

It’s not all bad news. A boom in housing construction is something stock market investors can take advantage of.

So, how can you invest in the housing construction boom that will, eventually, have to take place? If we are to avoid political upheaval, that is.

Well, there are plenty of home builders on the stock market. Not to mention materials stocks which sell to those homebuilders.

And you might want to tread carefully in the property market too.

Until next time,

Nick Hubble
Editor, Fortune & Freedom