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#AskCaCHE: Covid-19, housing markets & the economy – Twitter Q&A summary

The Economic and Social Research Council (ESRC)’s Festival of Social Science is an annual celebration of the social sciences and their impact on the wellbeing and economy of society in the UK. This year the Festival, which takes place from 7 to 15 November, is a digital-first event; and, for our part, we hosted a series of Twitter Q&A sessions throughout the week. This blog provides a summary of the third session (11/11/20) in which Professor Ken Gibb, CaCHE Director, answered your questions about his project on Covid-19 and the economy, part of a wider programme of work by CaCHE on housing policy and the pandemic.

Q1. To get us started, could you tell us some more about the aim(s) of your research?    

We are investigating the housing market and economy. We are following how the lockdown furlough and related schemes – increases to benefits, mortgage holidays and the like – came about, and their effects; and how we transition out of them.

Q2. Why do you think London house prices are still rising despite expectations of a demand shock?

You [Reuben Young] will know London’s market intricacies better than me but I do wonder about the artificial cliff edge of the end of stamp duty in the spring – will it lead to a collapse in transactions thereafter?

Q3. I wanted to ask what lessons if any we need to learn from the housing/economic response to the 2007/8 recession and whether some potential responses can support inclusive growth?

Mark Stephens is looking at that very question about the lessons from the GFC for now. I think we have the chance to ramp up green retrofitting for the existing stock, creating an industry and jobs to scale – see the recent IPPR report.

Q4. Do you think housing research by academia is less impactful on government policy than research done by practitioner organisations, think tanks, and campaign groups? If so, why? How could/should that change? (Sorry that’s not really covid-related but~)

Chris Foye is working on this. It is not surprising perhaps that academics are not as good at messaging as think tanks can be but also that academics can say more with the evidence even if it does not give politicians the steer they want.

[Response from Reuben Young] Watched the awesome @Resi_Analyst podcast with Chris about this. I think better messaging and PR would help, but I also think that because academics rely on data that has already been collected, it inhibits some of the biggest ideas about how things should be done differently.

Q5. Do you think, if implemented, Planning For The Future proposals to ensure enough land is zoned for automatic permission, and a levy that will be spent on on-site social housing to break absorption rate barriers, will help with the coronavirus UK recovery?

It was part of the rhetoric: reform would generate more supply quickly and would therefore be part of the recovery, etc. I think it would take time to implement and of itself makes big assumptions about developers building in a recession.

Q6. Hello Professor Gibb, at a time when the “behaviour” of people in lockdown is under scrutiny, and there is talk of “herd” immunity, I wonder does <behavioural economics> have anything important to say about housing markets at the current time?

Behavioural economics has a lot to say about housing markets e.g. explaining short termism in decision making which might explain the rush to purchase before stamp duty reverts (& lead to a bigger downturn?). See more at the economics observatory website.

Q7. The #ESRCFestival is a celebration of the social sciences and their impact on the wellbeing and economy of society – how would you describe the wider value of your research?

We are funded from the public purse and want to offer good value for money. The current public health and economic crisis is unprecedented and we seek to share evidence about it, and communicate findings and their meaning to citizens in novel, useful ways.

Q8. What stage are you at with the research and any other early observations you can share at the moment?

We have been gathering media commentary and secondary evidence from across the UK, participating in UK and international evidence fora sharing experiences, as well as interviewing a range of policy, practice and evidence/analysis stakeholders.

Crisis policymaking as we saw in lockdown was a massive co-ordination effort similar to a wartime emergency. Increases to Universal Credit, forbearance and mortgage holidays, and of course furloughing, were all critical to getting through the period.

The jury is still out on the necessity of stamp duty cuts and extending help to buy. Housing markets normally turn down in recessions and this may be exacerbated by a cliff edge when stamp duty reverts to pre-Covid levels in the spring.

Q9. Lastly, when will the results be available?

We plan to have an interim or first report around the turn of the year or maybe early to mid-January 2021, with a follow up report after a second round of interviews in the later summer. But this all subject to the fluid & evolving nature of the crisis.

 

 
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Date: November 13, 2020 11:19 am

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