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Putting Labour to the test on housing
Labour’s manifesto presents more questions than it answers, but there’s still room for optimism, writes Matthew Bailes, chief executive of Paradigm Housing
The housing crisis is acute and growing. Unless the next government makes radical changes, the figures on homelessness, overcrowding and affordability will all get worse. The number of older people living in the private rented sector will also continue to grow – a one-way ticket to pensioner poverty and an ever-expanding housing benefit bill.
In this general election, the test on housing for our politicians is whether they recognise these problems and have a long-term plan to address them.
The Conservatives fail the test. Their tune is essentially the same as the one they played in government – protecting the green belt, more demand-side subsidies, and a supply target that their plans won’t deliver. It will be interesting to see if this tune changes after the internal civil war that must surely follow the election.
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The Greens and the Liberal Democrats are much more ambitious. Both promise 150,000 social rented homes per annum. However, they do so from the comfort of a position in which they are unlikely to have to deliver these commitments.
Despite the headway it is making in the polls, Reform is also free to make promises which it is unlikely to have to deliver. Inevitably, its answer on housing is drastic cuts to immigration. If they have worked out a way to do this without breaking public services, university finances and the economy, they are not sharing.
The polls strongly suggest that we should be focused on what Labour has to say.
“Long-term answers to the housing crisis lie in making better use of existing stock and building more homes. Labour hasn’t said a great deal on the former... That suggests that most of the heavy lifting will need to be done through new supply”
Most of its manifesto is not new, but it does provide grounds for optimism.
I was particularly taken with the promise to “support councils and housing associations to build their capacity and make a greater contribution to affordable housing supply”. In practical terms, this should mean long-term certainty on rents, long-term clarity on regulatory standards, a route map on zero carbon, and enough funding to both meet new standards and to build more homes.
However, some big questions remain unanswered.
Long-term answers to the housing crisis lie in making better use of existing stock and building more homes.
Labour hasn’t said a great deal on the former. There is no indication that it will take on much-needed reforms of property taxation and, given fiscal constraints, it may not be able to make much progress on Local Housing Allowance rates. At least stronger protection for private renters and leaseholders is on the menu.
That suggests that most of the heavy lifting will need to be done through new supply.
If Labour achieves its target to deliver 1.5 million homes in England in the next parliament, it should at least have slowed down what could otherwise be a rapid deterioration in housing outcomes.
There are two reasons why a large proportion of these homes must be affordable.
First, affordable housing directly addresses need. Building homes that end up being bought by buy-to-let investors and second homeowners does not.
That helps explain why the number of homes built in England by private developers has only exceeded 200,000 in one year since 1945 – and that was 1968.
“It is not clear where this funding is coming from and, as things stand, it looks like Rachel Reeves will maintain an iron grip on public expenditure. But in this case the fiscally responsible thing to do is to invest in more affordable housing”
Rudimentary maths therefore suggests that, even if the market bounces back and there is a rapid recovery in development for sale, somewhere in the region of 500,000 affordable homes will need to be built if Labour is to achieve its target.
Even if Labour succeeds in delivering more affordable homes through planning gain, numbers on this scale will inevitably involve finding more money – both to ensure providers have the financial wherewithal to develop, and to fund development itself.
It is not clear where this funding is coming from and, as things stand, it looks like Rachel Reeves, the shadow chancellor of the exchequer, will maintain an iron grip on public expenditure. But in this case the fiscally responsible thing to do is to invest in more affordable housing – the alternative is a growing and a hopelessly unsustainable housing benefit bill.
So, my vote is for working as closely as we can with Labour to find some answers. The starting point is far from ideal, but at least there are signs that they have an appetite to confront problems that have been glossed over for far too long.
