Labour promised us ‘Homes not Assets’. We need to make sure they deliver, argues Ellie McLaughlin.

Britain’s housing crisis is one of the defining issues facing the new Labour government. But so far, Labour’s policy agenda to tackle the crisis lacks any indication that the party is willing to confront the core drivers at hand.

After years of house prices rising with the majority of real wages still below 2008 levels, home ownership – and more fundamentally, access to a safe and secure home – is now out of reach for many, and wealth inequality has soared. The latest data shows house prices in England to be over eight times average annual earnings, reaching twelve times in London. The slight softening of prices seen resulting from the Bank of England raising interest rates has not even touched the sides of just how expensive housing has become. With the selling off of social housing through Right to Buy, an increasing number of people are left with no alternative to our insecure, poor quality and expensive private rented sector. A lack of alternatives and insufficient regulation of the sector result in people facing dire conditions – impacts faced most severely by Black, Asian and ethnic minority households.

Housing – or rather, house building – was front and centre in Labour’s election campaign, and Labour’s pledge to build 1.5 million homes during their first Parliament featured heavily in the King’s Speech. Attention has quickly pivoted to if and how Labour can deliver new housing at this scale. Similar levels have not been seen since the 1960’s, and there are serious questions as to whether Labour’s commitment to ensuring that a high proportion of homes built are social and affordable housing is even possible when relying almost solely on private sector developers, as the new government plans to.

But as social housing journalist Peter Apps has pointed out, building homes is not the same as solving the housing crisis. And beyond reaching building targets, it’s unclear exactly what Labour’s vision for a better housing system looks like. It is notable that Labour’s manifesto didn’t include a chapter on solving the housing crisis, but that the Party’s most prominent housing policies were included as part of the plan to ‘Kickstart economic growth’. Labour portrays house building as a win-win: a route out of economic stagnation that will also make housing affordable. But promising that new building alone will make housing affordable – whatever metric you choose for this – is unlikely to pay off. 

As Positive Money’s research has shown, the key drivers of the housing crisis have not been a lack of supply of new housing. Rather, a toxic combination of housing and economic policy decisions have ultimately made homes into attractive investment vehicles, creating a damaging feedback loop of accelerating demand and pushing up prices. The deregulation of the private rented sector, the selling off of social housing stock through Right to Buy, taxes which have incentivised property speculation and landlordism, and financial deregulation and a period of ultra-low interest rates following the financial crisis – all have contributed to the situation we are in. Charting a path towards a better housing system for all requires a comprehensive strategy that reckons with these multiple factors.

This doesn’t mean that we don’t need new homes. We absolutely should embark on a large expansion of council housing stock, which can help to counter rapidly inflating private rents by offering an alternative tenure. This can be achieved both through building new homes, and through councils purchasing existing privately owned rental properties. But as government analysis suggests, meeting Labour’s 1.5 million new homes target is unlikely to put prices on a trajectory in which incomes catch up. It will also do little to address the immediate, dire situation faced by the increasing number of renters in unsafe, insecure and expensive homes. 

Some in the party have recognised that we need a fundamental shift in how we approach our homes to get us out of this mess. At last year’s Labour conference, Angela Rayner boldly stated that a “house should be a home, not an asset”. Followed through, this would mean a policy agenda that pursues equally good living conditions for all tenure types: social renters, private renters and homeowners, and ending our fixation on homeownership and building targets. This requires a willingness to address the distribution and commodification of homes, and standing up to the outsized influence of the property and financial sectors that reap rewards from our unfair housing system.

Polling suggests that the majority of the public would be on their side. We must push Labour to embrace this vision.

Ellie McLaughlin is Senior Policy & Advocacy Officer at Positive Money.

Image: House building in Bosbury. https://www.geograph.org.uk/photo/7517152 Copyright: © Philip Halling and licenced for reuse under cc-by-sa/2.0