June 26, 2023 - 10:00am
As long as mortgage rates remain low and homeownership remains relatively high, the Tories are likely to remain constantly in an electoral fight.
Even with unemployment over 10%, Margaret Thatcher’s “Right to Buy” scheme — which boosted homeownership — and her stewardship of declining mortgage rates provided her in part with the platform for electoral victories throughout the 1980s. Ever since, the housing market has been an important factor in Conservative electoral success.
However, the ongoing rise in mortgage rates threatens to undermine any electoral strategy Rishi Sunak might have. Even if current rates are low in comparison to certain periods over the last 50 years, this rise will cause financial stress equivalent to periods of record-high mortgage rates due to people nowadays borrowing much more relative to their incomes.
But what is especially interesting is that it will close the door on hopes the Conservatives might have of holding onto their Red Wall gains. There was a huge correlation between homeownership and Tory success in the Red wall in 2019. Yet with the rise of mortgage rates, the party risks losing its new voters as quickly as it gained them.
First-time homeownership expanded much faster in Red Wall seats than in the rest of the country under Tory government. The East Midlands lead the way with a 93% increase in new first-time buyers over the last 10 years, with the North East, Yorkshire and the North West all witnessing similarly significant increases in the number of first-time buyers, all of over 80% in the same timeframe. This is particularly stark when we compare it with the South West of England, which has only seen a 66% increase, and Greater London — not surprisingly — only a 35% increase. This rise in new homeowners in Red Wall areas likely explains in part why they have leaned towards the Conservatives.
When we look at the Tories’ current seats, only three have homeownership rates lower than 50%: Chelsea and Fulham; Kensington; and Cities of London and Westminster. These are all constituencies in London. Indeed, when we look back to the last time the Tories gained a seat from an opposition party, the Red Wall seat of Hartlepool in a 2021 by-election, we once again find that homeownership was 59.8% and the election was set against a backdrop of record-low mortgage rates.
Rising mortgage rates are thus very damaging for the Tories. First-time buyers are more likely to have mortgages; with the number of first-time buyers increasing in the Red Wall, mortgage rates will continue to become a more salient issue there. If mortgage rates continue to rise, first-time homeownership numbers will decline in the North and further cement Labour’s grip over the seats, as formerly Tory voters will become disillusioned with the party’s inability to support homeownership.
The solution is not so simple as to subsidise those with outstanding mortgages. This would further encourage the feeling among the increasing number of young people unable to get on the housing ladder that it is older homeowners, and not them, who are being prioritised. Unless the Tories move swiftly, this impending crisis will very likely damage the electoral success that the party briefly enjoyed in the Red Wall.
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SubscribeThe Red Wall seats are “threatened”. are they? After the Tories failed to deliver the Brexit people wanted, failed to do anything about nation-destroying levels of immigration, fumbled Covid, and seem set on destroying us through Net Zero, I would imagine that the Red Wall is on the same “endangered” list as the dodo and triceratops.
I feel your anger and frustration, Simon. I’m no fan of this Tory Government or those that have gone before it, but I’ve to ask:
Failed to deliver the Brexit people wanted. Which Brexit was that exactly?
Nation-destroying levels of immigration. I don’t suppose you’ve got any evidence to back up this claim?
Yes, I have. There is the 17% of our current population who were born outside the UK, plus of course all those who have illegally entered, plus those who are here legally (student visas, etc.) and who the government will not be able to remove. That’s an unprecedented change in our country, and one that is obvious to anyone in one of our larger cities.
And as we have an Indian heritage PM and Home Sec, and a Caribbean heritage Foreign Sec, just as examples, what do you mean by Nation destroying?
When you watch the England football team and the way fans react to them how do you feel given the diversity of that team? Nation destroying despite the ecstasy when they get to finals and semi-finals I guess?
The football analogy matters. It means more to many than politics and is one of our most obvious mirrors.
If you read what I wrote, I said that the levels of immigration are nation-destroying, not a tiny number of specified successful immigrants.
If you read what I wrote, I said that the levels of immigration are nation-destroying, not a tiny number of specified successful immigrants.
And as we have an Indian heritage PM and Home Sec, and a Caribbean heritage Foreign Sec, just as examples, what do you mean by Nation destroying?
When you watch the England football team and the way fans react to them how do you feel given the diversity of that team? Nation destroying despite the ecstasy when they get to finals and semi-finals I guess?
The football analogy matters. It means more to many than politics and is one of our most obvious mirrors.
I believe the Brexit most people voted for was to provide some protection from the radical change promoted by the Four Freedoms – immigration at unprecedented levels, unrestricted freedom of goods and capital etc.
And also a spur towards economic nationalist policies.
The business liberal Tories obviously arent good representatives of this Brexit
Well at least you have ‘believe’ in first sentence as we don’t know why ‘most’ voted leave. We can only speculate. My own speculation is without the belief it would reduce net migration significantly Leave would not have won. The rest of the argument attracted some but insufficient for a majority. Immigration was the key.
And of course the reason it hasn’t dropped is the Right, including Brexiteers, never been honest about the trade off that would be required. What do you think happens when your requirements are implemented? What happens to cost of living etc? What happens to inflation? Now longer term perhaps things rebalance but honesty about the short/medium term deeply lacking.
My theory is that the principal of being able to take back control of the four freedoms was the main reason for the Leave vote.
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Let’s not forget that the Remain side was never honest about the costs (direct and indirect) of staying in the EU, let alone the abject failure to put a strong case for staying in.
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“We can only speculate” as to why 48% voted to remain.
My theory is that the principal of being able to take back control of the four freedoms was the main reason for the Leave vote.
.
Let’s not forget that the Remain side was never honest about the costs (direct and indirect) of staying in the EU, let alone the abject failure to put a strong case for staying in.
.
“We can only speculate” as to why 48% voted to remain.
Well at least you have ‘believe’ in first sentence as we don’t know why ‘most’ voted leave. We can only speculate. My own speculation is without the belief it would reduce net migration significantly Leave would not have won. The rest of the argument attracted some but insufficient for a majority. Immigration was the key.
And of course the reason it hasn’t dropped is the Right, including Brexiteers, never been honest about the trade off that would be required. What do you think happens when your requirements are implemented? What happens to cost of living etc? What happens to inflation? Now longer term perhaps things rebalance but honesty about the short/medium term deeply lacking.
Yes, I have. There is the 17% of our current population who were born outside the UK, plus of course all those who have illegally entered, plus those who are here legally (student visas, etc.) and who the government will not be able to remove. That’s an unprecedented change in our country, and one that is obvious to anyone in one of our larger cities.
I believe the Brexit most people voted for was to provide some protection from the radical change promoted by the Four Freedoms – immigration at unprecedented levels, unrestricted freedom of goods and capital etc.
And also a spur towards economic nationalist policies.
The business liberal Tories obviously arent good representatives of this Brexit
Yes, one is rather weary of mortgage-angst and the folly of the No to Caveat Emptor Younger Generation. Net Zero Pol Potism is a far greater threat to Red Blue & Every Wall. It is just public awareness of the gravity of the wilful demolition of cheap reliable energy is still painfully dim. The avowed Climate Change Champion BBC will simply suffocate & censpr & warp public debate & understanding as it did so shamefully with Covid Lockdown. But the Net Zero catastrophe is already unfolding with the first signs of awakening in Germany. But it is all too late. The ok for nuclear was needed 20 years ago.
I feel your anger and frustration, Simon. I’m no fan of this Tory Government or those that have gone before it, but I’ve to ask:
Failed to deliver the Brexit people wanted. Which Brexit was that exactly?
Nation-destroying levels of immigration. I don’t suppose you’ve got any evidence to back up this claim?
Yes, one is rather weary of mortgage-angst and the folly of the No to Caveat Emptor Younger Generation. Net Zero Pol Potism is a far greater threat to Red Blue & Every Wall. It is just public awareness of the gravity of the wilful demolition of cheap reliable energy is still painfully dim. The avowed Climate Change Champion BBC will simply suffocate & censpr & warp public debate & understanding as it did so shamefully with Covid Lockdown. But the Net Zero catastrophe is already unfolding with the first signs of awakening in Germany. But it is all too late. The ok for nuclear was needed 20 years ago.
The Red Wall seats are “threatened”. are they? After the Tories failed to deliver the Brexit people wanted, failed to do anything about nation-destroying levels of immigration, fumbled Covid, and seem set on destroying us through Net Zero, I would imagine that the Red Wall is on the same “endangered” list as the dodo and triceratops.
I suspect the impact of the “mortgage crisis” is more psychological than real. Most people overestimate the proportion of households with mortgages. It’s only 38%. Most of those are fixed rather than variable. Only around one in 20 households faces the end of their fixed term in the coming two years.
The pain will be severe for those affected but it will affect far fewer than is generally imagined.
I suspect the impact of the “mortgage crisis” is more psychological than real. Most people overestimate the proportion of households with mortgages. It’s only 38%. Most of those are fixed rather than variable. Only around one in 20 households faces the end of their fixed term in the coming two years.
The pain will be severe for those affected but it will affect far fewer than is generally imagined.
I live in a so-called ‘red wall’ area. It isn’t one dimensional and all about Brexit. People were (and are) annoyed by Labour doing nothing for them for decades, feeling that Labour was now a laptop class London bubble party, that arrogantly assumed their support, and they wanted a change. They want to get investment in railways and roads and not be repeatedly told there is no money whilst billions are spent on other parts of country. Also it isn’t a ‘region’. The article shifts from the East Midlands to the North West, North East and Yorkshire. There is no ‘red wall’ region. The term is just a trope. I have no idea who people in traditional Labour areas that voted Conservative at the last election will vote next time round. If it is Labour it won’t be with any great enthusiasm or expectation of change.
I live in a so-called ‘red wall’ area. It isn’t one dimensional and all about Brexit. People were (and are) annoyed by Labour doing nothing for them for decades, feeling that Labour was now a laptop class London bubble party, that arrogantly assumed their support, and they wanted a change. They want to get investment in railways and roads and not be repeatedly told there is no money whilst billions are spent on other parts of country. Also it isn’t a ‘region’. The article shifts from the East Midlands to the North West, North East and Yorkshire. There is no ‘red wall’ region. The term is just a trope. I have no idea who people in traditional Labour areas that voted Conservative at the last election will vote next time round. If it is Labour it won’t be with any great enthusiasm or expectation of change.