This is Home Front with Vicky Spratt, a subscriber-only newsletter from i. If you’d like to get this direct to your inbox, every single week, you can sign up here.
Good afternoon and welcome to this week’s (slightly delayed) Home Front. The reason for the delay is that I was in Middlesbrough this Tuesday with former Labour Prime Minister Gordon Brown. More on that shortly. First, let’s talk about Donald Trump.
His victory in last week’s US election should not have come as a surprise to the Democrats. Why? America’s housing crisis.
Populists and some far-right groups are taking the opportunity to talk about housing crises and telling voters that they have the solution while other politicians have failed for years to sort things out.
Mainstream political parties and candidates around the world should take note because there is an important message for them in the detail of how Americans opted to vote.
In the US, there was a median increase in the vote for Trump of 3.1 percentage points compared to the 2020 election.
However, if you look at the top 10 per cent of American counties which are ranked most difficult to buy a home in, according to NBC’s New Homebuyer Index, the median shift was higher: 4.1 percentage points.
The housing crisis is as bad as Britain’s – if not worse by some measures. In the US, house prices have risen by an average of 48 per cent since 2019. Here, house prices have gone up by around 20 per cent in the same time period.
But specific attention must be paid to what was going on in counties in the key swing states: Arizona, Georgia, North Carolina and Pennsylvania.
In these places, house prices rose faster than the national average and more than doubled between 2019 and this year, according to analysis of data from Zillow (a property marketplace which is like the US version of Zoopla or Rightmove).
At the same time, home sales in America have been in a slump in recent years which tells us that buyers have been struggling. This will in no small part be because American mortgage rates have been higher than they were before the post-Covid inflation crisis, making it harder for people relying on credit to buy a home.
The average rate on a 30-year mortgage rose to a 23-year high in 2023 and is still above 6 per cent.
High house prices plus high mortgage rates equal low housing affordability and frustrated, priced-out first-time buyers. On the other hand, rising house prices can also mean that existing homeowners feel the benefits of their housing wealth.
So, it’s quite possible that America’s housing crisis turned key battleground counties in those swing states into political hot spots. Places where the vote was even more contested than it appeared to be on the surface because of what was happening in local housing markets.
Both Trump and his defeated rival Kamala Harris knew that housing was a problem for the people whose votes they wanted. They talked about it regularly.
Harris had a series of policies aimed at expanding affordable housing for buyers and renters. This included a $25,000 (£19,700) deposit assistance scheme and federal funds to speed up construction in major cities in the hope of adding three million new homes over four years. Note: that’s not that many.
Trump, on the other hand, vowed to create tax incentives for buyers (what exactly those will be remains to be seen) and promised to cut “unnecessary” regulation for housebuilding (again, what exactly those will be remains to be seen).
That’s not all Trump said, though. He echoed Reform UK’s Nigel Farage and claimed that he would lower housing costs for Americans by stopping illegal immigration.
As I’ve written at length, this is a spurious claim which offers little more than a simple parsing of a complex situation.
Nonetheless, it may have worked, and high housing costs might just have played to Trump’s advantage because an emerging body of research suggests that the global housing crisis is pushing voters towards populist candidates in elections.
In 2019, the University of Oxford’s Professor Ben Ansell and his colleague David Adler published a research paper on this very subject.
They used granular data at a local level to look at whether housing costs had shaped the EU referendum result in Britain in 2016, as well as support for populist politician Marine Le Pen in France’s 2017 election.
What did they conclude? That house prices played a major role in shaping support for Brexit and Le Pen.
Since that paper was published, the housing crisis across the West has become more acute.
Housing was a key concern for voters in last year’s Dutch elections. These were won by the far-right Freedom Party (PVV) headed by Geert Wilders, who is openly anti-Islam.
Similarly, in Portugal, where there have also been protests about housing costs, the right-wing populist party Chega increased its vote share in March this year.
Indeed, here Reform outpaced the Conservatives in some areas in July’s election and could yet emerge as the real opposition to Labour next time we go to the polls.
Reform made housing a central part of its pitch. Perhaps its boldest policy was the proposal to scrap stamp duty on all home purchases up to £750,000 and reduce the rates for more expensive properties.
A member of my own family who has never voted in an election before told me that he was so convinced this policy would help him buy a bigger house that he went out and voted Reform.
There will need to be forensic and detailed analysis of the Trump vote and how house prices may have shaped it, just as there will need to be for Reform here in the UK. But, if this emerging pattern across the West is anything to go by, Labour should be very concerned.
As former Housing Secretary Michael Gove reportedly briefed his Tory colleagues before standing down as an MP, one of the reasons the Conservative Party was in trouble was because it had failed to solve the housing crisis.
People are frustrated. Homeownership is not accessible. Renting is extortionate. There isn’t enough social housing. Deputy Prime Minister Angela Rayner and her Ministry of Housing colleagues know all this. They also know that building 1.5 million homes over this Parliament is a major task and one they must succeed at because, if they don’t, the consequences for them politically could be major defeat.
Key Housing
The Mayor of London Sadiq Khan has made a big claim this week. He said London’s housing crisis, specifically the fact that housing is unaffordable for so many people, is a “drag on economic growth”.
If house prices in the capital went down by just 1 per cent, Khan said it could boost London’s economy by £7.3bn over a decade.
Why? Because “it would make it easier for London’s business to attract and retain workers, reduce homelessness and the reliance on temporary accommodation and make it possible for households and businesses to invest in more productive areas of the economy. This in turn would lead to more jobs and more investment for future growth.”
He’s probably not entirely wrong.
Ask me anything
This week for AMA, I asked the questions. And the person answering them was Gordon Brown.
I wanted to know what Labour’s former chancellor, the man who redrew the boundaries of the welfare state and reoriented support towards low-income families, thought about the fact that child poverty is hitting new record highs in Britain today.
Hear what he had to say below or read my full interview with him here.
Send in your questions to: @Victoria_Spratt, on X, formerly Twitter, @vicky.spratt on Instagram or via email vicky.spratt@inews.co.uk.
Vicky’s pick
I have just finished reading The Road to Freedom by Nobel Prize winning economist Joseph Stiglitz. In his latest book, Stiglitz makes the case for state investment in public services in order to make the world a fairer place. He draws on the history of political philosophy, economic philosophy and contract law to make his case. I found it pretty convincing. At the same time, Stiglitz analyses the political right’s arguments in favour of deregulation and against the role of the state.
This is Home Front with Vicky Spratt, a subscriber-only newsletter from i. If you’d like to get this direct to your inbox, every single week, you can sign up here.
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