I am a firm believer that stable housing leads to more stable communities and better life prospects for residents within said communities.
During a debate, at a branch meeting almost 10 years ago, I was asked “how would you solve the housing crisis”. My answer was “councils simply have to build and buy more homes”. Over the past 10 years, my answer hasn’t changed.
I acknowledge that in that last ‘broad stroke’ of a statement, I implied that the private housing sector (PRS) shortage is easily fixed. Thereby trivialising, the thousands of dedicated housing staff, up and down the country helping solve, what is a modern-day travesty of Dickensian proportions. This is not my intention.
James Fransham in the Economist on 23rd May 2023, stated that it would take an awful lot of construction to alleviate the country’s housing shortage. The Centre for Cities calculated that between 1955 and 2015, Britain accumulated a shortfall of 4.3m homes—15% of the total housing stock—relative to the rate of housebuilding in the average European country. To clear the backlog in 25 years the country would need to build 442,000 new homes each year, an unprecedented level.
According to official statistics released in May 2023, long-term net migration to Britain amounted to 600,000 people in 2022. So, the problem is not going away!
But problems, even big ones sometimes can have a straightforward ‘fix’. A Labour government should enable councils to address this problem in a few ways; The supply of residential property via ready built units, sourcing units and land from over leveraged housing associations and developers, makes the access to much needed property much more identifiable than we think. How a Labour government finances this big, generational and community uplifting policy is the hard part.
According to calculations in a recent report published by the Centre for Cities, a think-tank, between 1950 and 1979 the country added new homes each year at a rate equivalent to 1.9% of its existing housing stock. Between 1980 and 2015 that rate fell to 0.8%, the worst performance in all but one of 11 other European countries.
In a recent article in Landlord Today, research commissioned by London Councils showed a 41 per cent fall in the number of homes available for long term renting in London since the pandemic.
The study, undertaken by Savills and the London School of Economics, also found that only 2.3 per cent of London listings on Rightmove in 2022-23 were affordable to low-income households where Local Housing Allowance was the principal monetary source to pay rent.
London Councils points to the reduction in the supply of private rental housing as a major factor behind the capital’s fast-rising homelessness pressures – including boroughs’ difficulties in securing temporary accommodation for homeless families. Combined with the cost-of-living crisis and longstanding shortage of affordable homes, borough councils describe the housing situation as disastrous.
I lived in private rented and council-owned accommodation for most of my childhood. I struggled in school and got caught up doing things that I shouldn’t have been doing. Much of this was because I was a young boy with little self-esteem and little or no role models to pull me into line when I was acting up.
I shudder at the thought of how I would have turned out if my mum with 6 children in tow had to navigate the PRS sector back in the day. I say this because the one thing that kept me moderately ‘anchored’ was a stable home, consistent friends and a familiar community that did not change every 18 months.
Councils, if enabled, are in a unique position to protect tenants from the worst excesses of the PRS market. But to achieve this, they need real generation-defining governmental support.
Government funding for housebuilding has shifted into rent subsidies, to private landlords and housing associations. This is not the fault of private landlords. So lazy troupes about rogue landlords are unhelpful. Our gaze should be on redressing the root cause of this huge society-inhibiting issue. I believe this could be achieved by working with the PRS in transferring housing stock from private hands back into council owned housing stock.
But how do we incentivise landlords to sell? It’s well documented that a record number of landlords are selling up and leaving the market. So, councils must insert themselves into this property supply chain. A Labour government should work at making it less complicated for private landlords to sell. To regulate competitive bidding, I would stipulate that councils could only purchase homes within their borough boundaries. To help incentivise selling landlords, reduced tax/capital gain liabilities and fixed and expedited conveyancing/ completion timeframes could be brought in.
Property experts, Savills say the monthly Capital Gains Tax receipt data shows that in the 2022/23 financial year, there were 151,000 home disposals. That’s the second highest on record, trailing closely behind the preceding tax year with 153,000 disposals.
So, we have clear data highlighting the scale of private landlords leaving the PRS. A Labour government should find a way to enable councils to move the most suitable stock into council ownership.
As a school governor to a large school and behavioural mentor to another, I see all too often an overlooked by-product of the PRS shortage of council owned/social housing homes – that is pupil withdrawals. Every September and sometimes mid-term, schools must manage the process of pupils not returning for the new academic year. This is often due to evictions and rental increases that force families to be uprooted. Conversely, schools must absorb new children, often ripped out of a community, school and home, all to start all over again.
This dynamic has many manifestations; lack of community attachment, lack of civic pride/care (litter, fly tipping), community engagement and sometimes crime. And in a school setting – behaviour and unfulfilled academic potential.
This impact of changing a child’s home environment can affect their education, and the school’s ability to provide the best education possible. We know that providing family stability is a significant component in a child’s education attainment outcome this is not to be underestimated.
If the housing shortage by-products above, do not form enough of a compelling argument, then how about another manifestation with wide societal ramifications – The Housing Benefit Bill.
The bulging national housing benefit bill should be enough to make the government and taxpayers sit up, pay attention, and want to fix this problem – at its roots. The housing benefit bill at over £25 billion is one of the biggest and fastest-growing parts of the welfare bill. That is a huge sum of money: more than we spend on the police, roads and military equipment combined. Over the past 30 years, this has continually risen, as have rents and renters!
I believe the business case around renewed council owned homes is unquestionable. The Labour Party should find the will to change society with modern housing policies, applying the same determination the Atlee government deployed in commissioning the NHS, some 75 years ago.
For more on Labour’s housing policy, see Healthy Homes: Labour’s Five National Mission Should Recognise the Connection Between Growth, Homes and Health.