Labour proposes radical shake-up of housing system

A radical shake-up of the housing system, which treats homes “as financial assets rather than places to live”, has been proposed by Labour.

Alongside plans for a new council and social house building revolution, the party has also made pledges around capping “runaway” private rents, a holiday homes levy and giving councils powers to buy back homes from private landlords.

The plans follow various pledges in recent years to tackle the housing crisis.

Here is a look at what has been said – and the challenges politicians face:

– What has Labour pledged?

Councils will be given powers and funding to buy back homes from private landlords and Right to Buy would be ended to “stop the haemorrhage of low cost homes” under Labour’s plans.

There would also be a levy on overseas companies buying housing, while giving local people “first dibs” on new homes built in their area.

In the private rented sector, “runaway rents” would be capped with inflation and cities would be handed powers to cap rents further.

But David Smith, policy director for the Residential Landlords Association, described the plans for rent controls as “nonsense”, adding: “The Office for National Statistics has shown that rents are increasing by less than inflation.”

New “renters’ unions” will be created for tenants to defend their rights under a Labour government.

There would also be a new levy on second homes used as holiday homes “to help deal with the homelessness crisis”.

Labour wants a council and social housing “revolution”, constructing up to 150,000 homes a year.

It proposes to build 100,000 council homes a year by the end of its first parliament.

A further 50,000 “genuinely affordable homes” would be built each year through housing associations by the end of the same period.

– What have other parties said?

A million more homes will be delivered in the next five years under Conservative housing plans.

The party has also vowed to introduce “lifetime rental deposits” so down payments can be transferred from one property to the next – before the deposit from the first property is repaid.

It would also review new ways to support home ownership following the end of the Help to Buy scheme in 2023.

Meanwhile, a Liberal Democrat government would also plan to invest in boosting the Local Housing Allowance by linking it to average rents in each area.

– What have government ministers previously promised?

In the autumn Budget in 2017, a package of new policies was set out to raise housing supply, with the aim of reaching around 300,000 a year.

Some commentators have pointed out that the Conservatives’ election ambition to deliver a million more homes in the next five years may give the impression of a downgrading of previous targets – as it implies an average of 200,000 new homes per year.

Polly Neate, chief executive of Shelter, has said: “The commitment to only build 200,000 a year when the Government’s own target is in fact 300,000 shows that even the Conservatives don’t think they’d be able to achieve this goal.”

A stamp duty cut for first-time buyers and reforms to planning rules to remove barriers to housebuilding have also been introduced in recent years.

– What progress has already been made?

Recent figures show the net injection of homes into England’s housing supply has surpassed a previous peak reached in 2007/08.

There were 241,130 net additions to England’s housing supply in 2018/19 – a 9% year-on-year increase, according to the Ministry of Housing, Communities and Local Government.

The main boost came from new build completions, with gains also coming from commercial buildings such as offices being converted into flats.

– What other challenges are there?

Housing affordability in some areas has worsened as prices have surged faster than wage growth.

Recent research from Halifax found that homes in some parts of Britain typically cost more than 18 times key workers’ average annual wages.

The average nurse, teacher, paramedic, police officer or firefighter can only afford to own a home in 8% of towns across Britain, according to Halifax.

It said average house prices have surged by 32% between 2014 and 2019 – more than four times average key worker annual earnings growth of 7%.

– What do others involved in the housing sector say?

The Home Builders Federation (HBF) has called for policies that ensure enough land comes forward in the right places quickly and efficiently, and more support for smaller builders.

Housing charity Shelter wants to see more investment in social housing.

Shelter said all political parties should commit to delivering at least 90,000 social homes a year over the next parliament “to provide a real solution to the housing crisis”.

– What do councils say?

Councils argue they should play a leading role.

The Local Government Association wants “a renaissance in council house building”, which it argues could be achieved through giving councils more powers and reforming the Right to Buy scheme.

Right to Buy, which enables people to buy council homes at a discount, has been blamed by some for adding to the shortage of social housing.

The recent awarding of the Riba Stirling prize for architecture to Goldsmith Street – a council estate in Norwich – highlighted the issue of council house funding.

Local councillor Gail Harris was quoted in The Guardian as saying: “Winning this prestigious award shows that it is possible to build fantastic new council homes, despite the challenges posed by central government cuts and restrictions around Right to Buy receipts.”