One of the first scandals for the Labour Government has come courtesy of Jas Athwal MP, who has been found to own several flats that are being kept in poor condition incluidng ant infestations, black mould, and eviction threats. This unfortunate trifecta comes with a sheen of irony given the Labour pledges to combat exploitative landlords by banning no fault evictions, introducing legal protections for tenants when it comes to mould, and putting an end to rental bidding wars and upfront payments. These are part of their broader plans to try to alleviate the housing crisis that occupies the minds of many, particularly those who do not own property. The fact that this staple of their manifesto is gaining this kind of bad press before it has even taken off is certainly not a welcome development for them as they return from recess. With Parliament now back in business, it is worth examining their plans for housing and assessing their feasibility and efficacy towards the aim of reducing housing costs and improving living conditions.
The manifesto included the following promises:
One and a half million new homes built within the first five years of this government
Updating the National Policy Planning Framework to restore mandatory housing targets
Reforming local planning to favour of sustainable development and ensure targets are met
Funding additional planning officers
Build a new generation of new towns
Granting Combined Authorities new planning powers
Reform compulsory purchase compensation rules
Increase social and affordable housebuilding through strengthening planning obligations to ensure new developments provide more affordable homes
Support first-time buyers through a permanent, comprehensive mortgage guarantee scheme
There plans for accomplishing these vary in levels of details. For example, there has been extensive discussion around where these new houses will be built and the need to reform the planning system to acheive this. This will involve building on brownfield and greybelt land, the latter of which threatens to raise the ire of local conservatives who prioritise the preservation of the natural environment. The reframing of "greybelt land" seems to be an elegant way to distinguish between greenbelt land that we would wish to preserve, versus that which is not particuarly usable otherwise, overcoming these objections. The desire to utilise the Combined Authorities and grant them greater influence in this process is also in keeping with their wider aims to devolve more power to them. The councils will likely resist these changes, but this it is unlikely to be unpopular to remove power from them in this area particularly given the widespread consensus that house building is needed. Whether they can hit this target remains to be seen.
The plans for new towns are perhaps less clear. Angela Rayner has said that a New Town Commission will be set up within the first six months of the new government. However, this project would invovle more than building houses, but also infrastructure including roads, hospitals, and schools. This would all be desirable, but costly. Given the fact that Reeves has suggested that the government will have tight pursestrings, it seems like a challenging prospect to successfully develop these towns.
The focus on sustainable and affordable housing will involve a delicate balancing act between interest groups. Due to the Conservatives delaying rules enforcing low-carbon building standards, house builder saved about £5,000 per home on average by not having to fit high-grade insulation, heat pumps, solar panels and other green technology. Therefore they are likely to push back on this in attempts to keep those costs low. It is crucial that Labour hold firm on this, not just for the planet, but to reduce the cost of energy bills. Also given the scale of housebuilding looking to take place, the cost of including these measures will likely reduce due to the sheer volume.
Housing associations have warned that there needs to be an emergency cash injection to develop social housing on the scale they are aiming to deliver. We are currently trending in the wrong direction in this area, with the number of affordable home starts falling by 22% over the 12 months to March 2024. The current plans seem to be relying on private housing to provide this affordable housing and instead providing mortgage support for first time buyers. They will be reviewing the current Right to Buy discounts this autumn, and have already introduced the Planning and Infrastructure Bill in the King's Speech.
Many landlords are already trying to get ahead of these upcoming reforms by trying to sell their properties, no longer seeing them as the assets they once were. And as is often the case when the cost of mantaining a property goes up, this cost is often passed on to the renters. So while renters are likely to be more secure in their homes and have less exploitative conditions, the price is likely to reflect this better living situation.
Beyond what has been promised, what else could Labour potentially do to improve housing in the UK? There has been some discussion around the possibility of rent control, although this has been shot down in the first instance. These are being championed by Sadiq Khan, but there is an understandable resistance as it is a short term fix that could also disincentivise landlords and therefore reduce the supply of rental properties, which is what caused the high prices in the first place. Labour could also drive up the affordable and social housing stock is by investing in it directly, although again this seems more costly than they are willing to go. While the focus on increasing the supply of homes is the correct approach to reducing house prices, the effects of this will take a while to filter through. The impact is also not proportional; a 250,000 house increase in housing stock will only decrease housing prices by 2%.
Overall, these reforms are the right first step in improving the housing situation in the UK. Unfortunately, the hole we are in is so deep that we are unlikely to feel the impact of it for some time to come. That is not to say that we should not take forward these plans, and perhaps others like the proposals above. But our expectations should be temperred, which could perhaps be a growing theme of a government constrained by a extremely challenging economic inheritance, exacerbated by self imposed fiscal rules.
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