Everyone, even the Tories, agrees that Britain has a housing crisis. The government’s Housing White Paper, published in January, was called “Fixing our broken housing market.”
The problem is that the Tories offer a few tweaks to the planning system and then revert to market solutions. The idea is that private developers will then build more houses and the increased supply should bring down prices and private rents — problem solved.
The most visible sign of the crisis is homelessness. On any average night in England, approximately 4,000 people are sleeping rough — twice the number of 2010. The numbers of people applying to local councils for help because they are homeless has also doubled over the same period.
As of December 2015, 75,740 households were in temporary accommodation, waiting for a permanent home: 10 per cent more than the previous year and 58 per cent more than in 2010. These days a permanent home no longer means a long-term home, or a council home. A permanent home could mean just one year’s tenancy in the private rented sector.
The key issue is supply — but not the supply of expensive homes for sale. Average house prices are now around seven times average annual earnings.
The average rent paid in the private rented sector is £179 per week and in London £298 per week. Some Londoners pay up to 70 per cent of their income in rent. Shelter estimates that, nationally, half of all privately renting tenants struggle to pay their rent.
Building more homes for sale or commercial rent might bring prices down, but only if the market is sufficiently saturated that demand starts to decrease. When housing campaigners estimate that at least 250,000 new homes need to be built each year in order to keep up with demand and the numbers built last year were only around 150,000, the scale of the crisis is obvious.
The issue is supply of genuinely affordable housing.
Labour went into the 2015 general election with a detailed manifesto on housing. It included a promise to build 200,000 new homes each year, to control private rents by legislating to require landlords to offer three-year tenancies and to give local authorities powers to penalise developers who leave land earmarked for house building empty — “land banking.” This practice by developers illustrates just how the market cannot deliver sufficient numbers of affordable homes — it can be more profitable for developers to acquire land and then sit back and watch it escalate in value without even building on it.
When Jeremy Corbyn stood for re-election as Labour Party leader in 2016 he stood on a manifesto of 10 pledges. His housing pledge was that a Labour government would build 1,000,000 new homes over five years with at least half of those homes built by councils.
The onerous restrictions on councils borrowing money would be lifted and councils would be enabled to borrow using their existing stock as security.
Building more council homes would start to meet the affordability gap — people who cannot afford to buy and are struggling to pay private rents would have another option. Council waiting lists would decrease. And, as housing became less of a scarce resource, house prices and private rents might yet fall.
The Labour Party’s National Policy Forum is now consulting party members on policies that will help to form the next general election manifesto. On housing, it asks how local authorities can help solve the housing crisis, how can Labour help social housing providers deliver high quality homes, what are the benefits of shared ownership or discounted home ownership and how can standards be improved in the private rented sector.
Labour’s next manifesto should contain the bold aim that no-one is left homeless. To do that, councils need to be enabled to build at least 500,000 new homes.
Existing council stock should be retained — the sale of council houses required by the Housing and Planning Act 2016 (not yet in force) should be reversed and there is a good case for ending right to buy, which is now abolished in Scotland while the Welsh government is consulting on its abolition.
Rents in the private rented sector need to be controlled and tenants offered security. There are a number of ways to do that: minimum contractual terms as offered by Labour in 2015, a national system of rent controls (abolished by Thatcher in 1988) or a more sophisticated system allowing local councils to regulate private rents in their local areas.
It’s not possible to tackle housing without also tackling poverty. People are homeless because they are poor. Since 2010, the Tory governments have introduced the bedroom tax, cut housing benefit, subjected claimants to sanctions, slashed disability benefits and frozen amounts paid below inflation. Above all, the benefit cap — lowered last November to £20,000 for families with children, £23,000 in London — is making private renting unaffordable for families in most parts of England.
When there is barely any social housing on offer, and private rented housing is unaffordable, families end up homeless and placed by council in expensive, insecure and sub-standard temporary accommodation. That’s bad for them and uneconomic for government.
From yesterday three more offensive cuts to benefits come into force. Child tax credit is limited to only two children per family regardless of how many children are actually born after April 6. Also housing benefit or help with housing costs for 18–21-year-olds is abolished. Some will stay with their parents, others may end up on the street. Bereavement benefits are also cut — perhaps the cruellest cut of all.
Labour could commit itself to its own Great Repeal Bill — a bonfire of all the punitive measures attacking benefit recipients since 2010. Housing benefit should cover market rents, which, if regulated, will fall anyway.
Council tenants should not be penalised for a “spare” bedroom, disabled claimants should be treated with dignity, welfare benefits should be paid according to need — not capped at an arbitrary amount, or number of children.
Social security should be seen as just that — a decent safety-net provided by society.
Liz Davies is a Labour Party activist and housing rights barrister. Member of Southampton Test CLP and Unite the Union. Previously secretary for Hackney North CLP (2017–2018). Co-author Housing Allocation and Homelessness law and practice (Luba, Davies, Johnston and Buchanan, 2018, LexisNexis) and Honorary Vice-President of the Haldane Society of Socialist Lawyers. Her professional profile is here. She cannot respond to queries about legal cases through this website.Read full bio