It’s not just Tory councils – all parties have failed on social housing. Now the coalition has a chance to show it wants to help
Labour has criticised Conservative councils for failing to build enough social homes, yet almost every local authority is failing to deliver anywhere near enough to meet the needs of local people. Politicians of all parties have failed to get past tinkering to make the tough decisions needed to get our broken housing system back on track.
A quick look back at some of the stories to hit the headlines this summer can leave us in no doubt about just how critical Britain’s housing crisis has become. Rents are at record highs, rising faster than people’s pay packets. House prices grew three times as fast as wages over the last decade. And Britain’s housing costs are the third highest in Europe, behind only Denmark and Greece.
Behind the figures is the very real impact all this is having on people’s lives. Families are cutting back on food to keep a roof over their heads, while young couples are putting their lives on hold, even to the point of delaying starting a family, because of the lack of affordable homes. An entire generation is facing up to the prospect of a lifetime renting from a landlord because even if they work hard and save hard, they’re still unable to save enough for a deposit.
This dire situation has been decades in the making, the result of underinvestment and failure by successive governments to effectively tackle our housing crisis.
Thankfully, the strong economic case for building more homes seems to be finally getting through. The government is gearing up to an autumn housing announcement aimed at getting housebuilding going in a bid to boost the economy and provide jobs, and we’ve had some hints over recent weeks about what this could include, such as money to get stalled building sites up and running, further relaxation of planning laws and controversial plans to sell off expensive council homes to fund the building of new ones. Last week, the government’s Montague review published proposals to encourage private investment in build-to-let developments to boost the supply of rented homes.
We don’t yet know which, if any, of these proposals will be taken forward. The big question is how the government will use this golden opportunity not just to lever economic growth, but also to show it’s on the side of hard-pressed families and priced-out young people up and down the country. This won’t be achieved by either building more expensive, insecure private rented homes where tenants face eviction or rent hikes at any time, nor by trading off social homes in city centres to build them elsewhere. We need significant numbers of new, genuinely affordable homes in areas where there are jobs and employment, providing people with the stability they need to get on in life.
Obviously there is no replacement for public investment in house building: this is the most straightforward and effective way of getting more homes built. But there are a range of other, less cost-intensive options that should be considered. Public land could be used to deliver homes for sale at cost price, rather than market price. New structures such as a National Housing Investment Bank and more sustainable mortgage finance products would help promote stability in the market. Revenues from new rates of stamp duty and the capital gains tax levy on foreign-owned property could be channelled into building affordable homes. All receipts from right-to-buy sales should be reinvested in new supply locally, as should proceeds from higher council rents.
We need creative, bold and radical action to solve our housing crisis. All political parties have failed on housing. Now they need to come together to fix it.