Election 2017: some missing bits from Labour and Conservative housing policies

Election 2017: some missing bits from Labour and Conservative housing policies

Big gaps in the published plans of the two largest parties have been an unhappy feature of this troubled and unconvincing election campaign, with housing policy standing out. That matters a lot in London, where high housing costs are such a concern. Happily, though, a bit more detail has been emerging since the manifestos were published.

Inside Housing grabbed some time with housing minister Gavin Barwell, who is otherwise busy defending his tiny 165 vote majority in Croydon Central. What did the Conservatives’ promise of “a new generation of homes for social rent”, to be built by local authorities, really mean? The answer, unsurprisingly, is that it doesn’t mean “social rent” as traditionally defined but the usually more expensive “affordable rent”.

This tenure was introduced by the Tory-led coalition government in 2010. It meant the state would help fund housing association homes with rents of up to 80% of local market rates rather than the roughly 40% usual for social housing. Confusingly – some say deliberately – “affordable rent” homes were often defined as “social rent” ones by the government because the same categories of people are eligible for them.

Some of the outrage about “affordable rent” is overdone. At the lower end of the scale, the rents for these homes can be very similar as traditional social rents. Many people who qualify for them also qualify for housing benefit, so as long as the affordable rents they pay are below the relevant housing benefit cap, they are no worse off. Also, in London, existing planning policy aims for “affordable rent” levels across the city to average 65% of local market rates, which might not be ideal but is better than a blanket 80%. Even so, Barwell’s clarification will disappoint some.

The better news from Barwell is that he stopped short of committing to going ahead with David Cameron’s policy of forcing councils to sell their most valuable housing when it became vacant in order to help pay for extending the Right to Buy to housing association tenants. This was hugely controversial, especially in the capital where so many “high value” council homes are. How would they ever be replaced? Inside Housing says Barwell’s comment goes an important small step further than in an interview in March, when he said only that the policy might be “mitigated”.

That said, the housing association Right to Buy extension remains in place, at least in principle. How housing associations would be compensated for the loss of stock if high value council sales don’t go ahead is not yet clear. But one other bright note from the Inside Housing interview is that the promised “new generation” of social/affordable rent homes could be enabled by allowing some councils to borrow more money to make it happen – something London boroughs of all political colours in have been campaigning for for years.

Labour’s manifesto makes more attractive pledges on housing, as it does on several other issues. It promises “at least 100,000 council and housing association homes a year for genuinely affordable rent or sale”. But it doesn’t say where those homes would be built. It doesn’t say if borrowing caps on councils would be lifted. It doesn’t say, either, that Labour would do away with Right To Buy. And, oddly, the terms “social rent” and “social housing” are completely absent.

But now we have a separate, supplementary manifesto from Labour solely on housing. Does this fill in some of those gaps? What else does it say that the main manifesto does not? Written by John Healey, Labour’s well-regarded shadow housing minister, the party’s New Deal on Housing strikingly promises to help 100,000 young first time buyers over a five year period with “FirstBuy Homes” whose mortgage costs would be set at a third of average local incomes. It also pledges to cut stamp duty to zero for first-time buyers on properties costing up to £300,000.

There is a clear pledge to “stop the government forcing the sale of council homes through their high value levy”, which is important. On Right to Buy Labour says it would “suspend” it and only allow councils to reinstate it if they have satisfactory plans to replace each home sold. Local authorities are promised help with getting hold of land for development, compulsory purchases at lower prices and “use it or lose it” powers against developers who land bank. Still nothing on lifting borrowing caps, though.

In this new document, the term “social rent” does appear. The section headed Affordable Homes says Labour would “prioritise homes for social rent” and also introduce “two new types of affordable home linked to local incomes area by area”. One of these new types is the discounted FirstBuy homes, mentioned above. The other is a “living rent” product, which looks the same as the one Sadiq Khan is introducing in London, although Healey’s document doesn’t say if Labour’s nationally would entail the Living Renter eventually owning the property in some form, as Khan’s does.

But the most intriguing gap in the manifesto still isn’t quite covered. Although “social rent” is mentioned in this new document, the “affordable rent” tenure is not. Does that mean the term “social rent” is effectively being used by Labour in the same expanded way as the coalition did and as Barwell says any new Tory government would continue doing? In other words, would the definition of “social rent” under a Labour government include homes with rents as high as 80% of local market rates? Should there be a Prime Minister Corbyn come Friday morning, I’ll make a point of asking.

Labour’s New Deal On Housing can be read here.



Categories: Analysis

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