Our housing crisis is a long-running, festering wound in the UK’s body politic. It divides society into two nations: one in secure homes, the other in highly insecure homes or homelessness. We are unhealthily obsessed with the divide between Leavers and Remainers, but the social and economic inequality caused by our housing deficit divides us far more profoundly.
The UK’s average house price is now eight times higher than average income. One million people are on social housing waiting lists and every year and the UK misses its house building target by over 100,000 homes. This Christmas, 125,000 UK children will be homeless. The only way to end this suffering is to heal the housing hole in our society.
As the general election campaign enters its last week, none of the main parties have completely risen to this challenge or realised the scale of ambition required. We need a multi-tenure housing crusade. This means empowering and uniting public and private sectors in delivering council, social, build-to-rent and build-to-sell housing. The needs of the millions of people wanting many different types of homes can only be met by a combined solution that galvanises our whole society.
Labour wants to have a mass council house building programme. It is absolutely right about this. No UK housing crisis has ever been solved without a major contribution from state-financed council housing. Bevan and Macmillan unleashed council house building to solve the post-war housing shortage. We need to repeat their success.
Labour are also right to recommend the end of Right to Buy. We have had 40 years of selling off council homes at average discounts of 40%. It has taken away two million homes that were a precious community resource for housing poorer people. It has also turned the state from a rent receiver into a rent payer (through housing benefit paid to the private landlords who now own much ex-council housing). Scotland and Wales have ended Right to Buy. England should do the same.
However, many of Labour’s other proposed policies would place excessive and unreasonable burdens on the real estate markets. In some cases, they would have the opposite effect to the one Labour want. Labour says tenants should have the right to consent to, and stay in, new regeneration schemes. This would just mean far fewer big regeneration schemes ever going ahead. Equally, Labour’s proposal to purchase house builder and institutional land banks at no-planning-gain value would damage share prices and restrict build-to-sell housing pipelines. Rent controls could kill institutional build to rent, just as it is starting to make a real contribution to our housing market.
Both Labour and the Conservatives are proposing new burdens on overseas buyers; Labour with a levy on overseas companies buying housing and the Conservatives with a 3 per cent SDLT surcharge on foreign house buyers. The risk here is obvious. Brexit Britain needs large amounts of foreign direct investment, so any new property taxes must be carefully balanced so as not to deter that.
Both parties have also promised to protect the Green Belt, that sacred relic and vote magnet of bourgeois Britain. This is fine where the Green Belt is really green but too often it is actually scuzzy-brown belt crying out for housing to be built on it (you can see why I’m not standing for election).
The Conservatives have produced a policy-lite “José Mourinho manifesto” – park the bus and don’t lose the poll lead. Their housing policy is effectively more of the same. Right to Buy stays and Help to Buy is extended to 2023. More positively, they will encourage long-term mortgages to help those struggling to find a deposit. They will also require and provide funds for key social infrastructure, such as schools and GP surgeries, to be in place before residential developments are occupied.
The Liberal Democrats have some sensible housing policies, which have predictably been almost completely ignored in this febrile and extreme campaign. They would invest to build 300,000 homes a year by 2024. They would require all new homes and commercial real estate to be built to a zero carbon standard by 2021. This deadline is too soon and too disruptive, but the idea of a zero carbon deadline must be right. A £15 billion investment would help insulate 26 million homes.
Big property owners will be less keen on their proposal to replace business rates with a commercial landowner levy (Labour have promised to consult on a similar measure). Depending on how it is introduced, a measure like this could have a damaging effect on real estate returns and values.
Our adversarial political system may simply be too broken to solve the housing crisis. Many of the policies needed to deal with it (mass council house building, higher taxes to fund state investment, re-designating the Green Belt, to name a few) are natural vote losers. The best way to solve our housing crisis would be to set up a Royal Commission to consider it, with all parties agreeing to abide by the resulting recommendations. But that’s about as likely as Danny Dyer being the next Dalai Lama.
Bruce Dear is head of London real estate at Eversheds Sutherland