Authors:LAG
Created:2014-11-01
Last updated:2023-09-18
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Whatever its hue, the next government will need to face down vested interests to solve Britain’s housing crisis
Affordable housing seems set to become an election issue, with the Labour party’s publication last month of the results of Sir Michael Lyons’ review into the future of housing (see page 4 of this issue). The big question is, will these policies, or those of the other main political parties, make any difference to the housing crisis which is engulfing most parts of the country?
According to figures from the Department for Communities and Local Government, in June 2014 there were just under 60,000 households in temporary accommodation which met the definition of statutory homelessness – an increase of six per cent on the same period last year. These figures represent the sharp end of the crisis, with many more people forced into renting inadequate accommodation and being unable to afford to buy a home.
Labour is pledging to build 200,000 new homes a year by 2020. As part of a national plan to meet this target, Lyons proposes making local authorities responsible for producing plans for house-building to meet the needs of local communities. The Lyons report also proposes controls on the right to buy council houses.
Under the Lyons proposals, which will form the basis of Labour’s housing policy going into the general election, a raft of powers will be given to councils to meet the demand for housing. These will include allowing priority access to new homes for people who have lived in an area for at least two years. Councils will also be allowed to restrict sales of homes to prevent them being bought by buy-to-let investors.
The Conservatives have promised to build 100,000 starter homes for people under 40, which will be offered for sale at a 20 per cent market discount. Their offer to the electorate also includes a rent-to-buy fund aimed at young people.
A major downside of Labour’s plans is that local councils will still be restricted by the Treasury on the amounts they can borrow to build social housing. LAG believes that this restriction will limit the availability of affordable rents in many areas of the country where costs have risen beyond the means of people on average or lower incomes.
Both Labour and the Liberal Democrats share similar ideas on the reform of housing law. Labour wants to abolish assured shorthold tenancies and replace them with a system of three-year tenancies to provide more security to the nine million people who are now renting privately. It is also proposing a system of rent control, linking rent rises to a formula based on inflation, rather than rising property prices, which is what is happening in the current rental market.
‘Tenants are often afraid to complain about disrepair or harassment because an assured short-hold agreement allows a landlord to end the tenancy after only six months.’
The Liberal Democrats have the most ambitious plans of the three main political parties for house-building. They have a target of 300,000 homes a year. They share Labour’s aim of introducing more secure tenancies. In a policy paper published two years ago they also proposed a system of discounted rents which would allow social landlords to vary rents based on ability to pay.
Reforming tenancy law is something LAG believes is long overdue. Housing practitioners are all too aware that tenants are often afraid to complain about disrepair or harassment because an assured short-hold agreement allows a landlord to end the tenancy after only six months. Measures to control rents are also essential to provide security for tenants.
Obtaining the land needed to expand the nation’s housing stock will mean that local councils, backed by the government nationally, will have to take on a combination of vested interests, ranging from house-owners, unhappy at increased home-building in their neighbourhoods, to investors trying to maximise their profits from the land they own.
LAG believes that tackling the housing crisis will ultimately not just depend on the political parties presenting the right policies at the election, but the next government showing the leadership necessary to implement them. More than anything this will require them to have the political courage to face down the powerful interests who benefit from the current status quo of the under supply of new homes and the resulting spiralling prices in the housing market.