Labour has thrown down the gauntlet on housing policy
Marc Bloomfield
Homelessness is an issue to which Legal Action often returns. This month, Andrew Arden QC and Justin Bates discuss the Homelessness Reduction Act 2017. They welcome the Act, which came into force last month, but recognise that the legislation does have its flaws, not to mention a lack of funding from central government, beyond an initial two years, for local government to implement it. Moreover, the housing crisis is not something that can be tackled through law reform alone, as government policies are failing to get to grips with what is at its root: a lack of affordable homes.
Successive governments have tried to increase the number of affordable homes by encouraging the use of planning policy to require developers to build them. There has been progress of sorts. Last year (2016/17), according to the government, a total of 41,530 affordable homes were built. These comprised 5,380 for social rent, 24,350 for affordable rent and 11,810 intermediate affordable housing.1Affordable housing supply: April 2016 to March 2017 England, DCLG, 9 November 2017. Taking out the social rent homes from the calculation, however, begs the question: how many of the remaining were genuinely affordable?
Affordable rent usually means a discount of 20 per cent on the market rent, collected by private landlords, but in many areas, even with the discount, this is beyond the means of average and low earners. Intermediate rent is a similar discount offered by housing associations, with similar affordability issues. There is also the added problem of the benefits cap, which would apply to many of the so-called affordable rents in the more expensive areas of the country. For a couple with children, the cap applies at £384.62 pw outside Greater London and £442.31 pw inside it. Research has shown that no suitable accommodation in the private sector would be available in London for a family of two parents and two children caught by the benefit cap.2Giles Peaker, ‘An inconvenient problem’, Nearly Legal, 10 June 2015.
Lack of affordable housing is a problem that is most usually associated with London and the South East, but there is evidence that other parts of the country are affected as well. An Institute for Public Policy Research report published last year found that provision of affordable housing was falling short in 92 per cent of local authorities.3Priced out? Affordable housing in England, IPPR, November 2017. Greater Manchester had the most serious shortfall, missing its target by 42 per cent. Councils are also failing in their duty to require developers to build affordable homes to rent; in Sheffield, for example, only 97 out of 6,943 homes approved by planners in 2016 and 2017 met the criteria.4Helen Pidd, ‘Housing crisis: 15,000 new Manchester homes and not a single one “affordable”’, Guardian, 5 March 2018.
Labour has pledged to shake up policy around affordable housing if it returns to government. In a green paper published last month, Housing for the many, the party stated that it wants to scrap the current policy of discounted rents, instead setting them and mortgage costs at a third of local household incomes, as well as allowing councils and housing associations to borrow cash to ‘build again at scale’ (page 14, para 51). The party has received wide support for the plan, including from the estate agent, Savills, which says that investment ‘to support people who cannot access the housing market, is something we have been talking about for a long time’.
In contrast to the Blair and Brown governments, Labour is also pledging that it would suspend the right to buy for public sector housing tenants. This was a totemic policy of the Thatcher years that enabled tenants to purchase their council homes at a discount (currently up to either 70 per cent or £80,900, whichever is lower (£108,000 in London)). The policy has led to the loss of tens of thousands of houses from the public sector and was extended to all social landlords under the coalition government. Labour says in its green paper that 50,000 homes are currently sold off under the scheme each year.
Perhaps the most radical policy that Labour proposes is an English Sovereign Land Trust. It would work with local authorities to enable them to purchase land for house building ‘at a price closer to existing use value’ (page 22). The idea behind the trust seems to be to intervene in the market to reduce the value of land for building affordable homes.
The timing of the publication from Labour is significant. The party is throwing down the policy gauntlet to the government, which is due to publish a green paper on social housing soon. Announcing the paper in his speech to the National Housing Federation conference in September 2017, Sajid Javid, then housing, communities and local government secretary (he was replaced by James Brokenshire in the cabinet reshuffle on 30 April), promised a ‘wide-ranging, top-to-bottom review’ of the issues affecting the sector. It will need to be. A recent blog post from the Joseph Rowntree Foundation (JRF) argues that there is a shortfall of 30,000 in the number of affordable homes being built each year that the government needs to address, as building more low-cost homes ‘will loosen the grip of poverty’.5Affordable housing: why current plans to invest don’t go far enough’, JRF, 27 March 2018. The JRF is right.
2     Giles Peaker, ‘An inconvenient problem’, Nearly Legal, 10 June 2015. »
3     Priced out? Affordable housing in England, IPPR, November 2017. »
4     Helen Pidd, ‘Housing crisis: 15,000 new Manchester homes and not a single one “affordable”’, Guardian, 5 March 2018. »

About the author(s)

Description: Steve Hynes
Steve Hynes is a freelance consultant and writer. He was previously director of LAG. He is a well-known commentator in the written and broadcast media...