By Martin Wicks
This article was published in Inside Housing
Labour’s housing policy does not put enough on emphasis on building and protecting council housing. It is time for the party to listen to its members, writes Martin Wicks
It’s time to talk about council housing, said Martin Hilditch in an Inside Housing editorial. This message was reinforced in articles by Martin Tett and John Perry. Labour Party members certainly agree.
But the gulf between their aspirations and Labour’s official housing policy was reflected by the composite resolution passed at last year’s conference in support of 100,000 ‘social rent’ homes a year and for ending Right to Buy.
Currently Labour has no commitment to fund either a specific number of council homes or a guarantee of grant for councils. It is committed to only 100,000 ‘affordable homes’ a year for rent and sale, by the end of a five-year parliament. John Healey’s office has said that it does not envisage 100,000 ‘social rent’ homes a year being built until the second term in office. Neither has he committed to ending Right to Buy, supporting a suspension instead.
Frustrated with this situation, some Labour members have launched the Labour Campaign for Council Housing, which is calling on the party to commit to:
- Build 100,000 council homes a year, funded by annual government grant of £10bn (£100,000 per property)
- End Right to Buy in line with last year’s Labour conference vote
The grant available from New Labour’s National Affordable Homes Programme was £60,000 per property. Offering funding at the level of 2008, £4bn a year, is completely inadequate given the scale of the housing crisis. Moreover, it will be for ‘affordable ownership’ as well as ‘social housing’; £100,000 would be a more realistic grant.
Councils would only be able to move from the small numbers they are currently building to a large-scale programme if they have a guarantee of grant on an annual basis. Otherwise they will not have the resources needed to plan and execute building on a large scale. You cannot bring together the teams to do this unless they have annual programmes. “With home ownership beyond the means of millions, and council tenancies like gold dust, many people are forced into the private rented sector where rents have outpaced inflation and earnings”
Under Labour’s current proposal, councils could fulfil their duty to promote ‘affordable housing’ without building a single council home. They could simply apply for grant for ‘affordable ownership’.
Rather, Labour should introduce a duty on councils to build council housing. Liverpool City Council’s recent decision to reopen a Housing Revenue Account (it transferred all its stock to housing associations) in order to build council housing again is a straw in the wind. Others would have to follow suit if they had a duty to build council housing.
An estimated 40% of council homes sold are now owned by buy-to-let landlords charging much higher private rents, which drives up the benefit bill. With home ownership beyond the means of millions, and council tenancies like gold dust, many people are forced into the private rented sector where rents have outpaced inflation and earnings, nearly a third of properties are ‘non-decent’, and there is no security of tenure.
We agree wholeheartedly with Mr Tett when he wrote: “There is a desperate need to reverse the long-term decline in council housing in this country. Councils are well-placed to plug this housing gap and a renaissance in council housebuilding is necessary if we are to stand any chance of solving our housing crisis.”
There can be no resolution of the housing crisis without councils building on a large enough scale to significantly increase the available stock for the first time in a generation. There are only 1.59 million council homes left in England.
The big building companies that have dominated the market are not interested in building for social needs. The Financial Times got it right when it said in a recent leader: “The fact is that private developers, left to their own devices, will not build enough to meet demand, when the greatest need is for affordable rented housing in urban areas. It is not in their interest to do so, since the result would be lower house prices and land values, eroding their profitability.” “There can be no resolution of the housing crisis without councils building on a large enough scale to significantly increase the available stock for the first time in a generation”
There are no market solutions to the housing crisis. When the Atlee government decided that a mass council housebuilding programme was necessary to tackle the crisis, four out of five homes built were council homes. It restricted the market to 20% of new builds and private companies had to apply for permits.
In order to address today’s crisis, Labour can similarly restrict the housing market by funding the building of 100,000 council homes a year. This will free hundreds of thousands of households from being forced to participate in the housing market. A side effect of this is likely to be falling prices, making mortgages more affordable for those who want to buy, and shrinking the exploitative private rental market.
The Labour Campaign for Council Housing is circulating a model resolution for Labour’s conference this year along the lines of the two bullet points above. To contact us and get involved, email: email@example.com.