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The Conservative and Labour housing policies explained

PUBLISHED: 11:28 10 October 2017 | UPDATED: 16:12 10 October 2017

Council housing in Camden

Council housing in Camden

PA Wire/Press Association Images

The prime minister proposed the build of 25,000 extra social homes in two years, while Corbyn announced plans to implement a cap on rent increases

Housing was one of the biggest issues in the 2017 general election. It’s a basic function of government to ensure everyone has a place to live.

Yet, with successive governments failing to build enough housing, particularly social housing and the furore surrounding the Grenfell disaster in June, it is now more important than ever that the government come up with viable solutions to what is a worsening housing crisis, and rising homelessness.

So how do Labour and the Tories plan to fix this? Our round-up of what was announced at each of the major party conferences over the last two weeks summarises the main proposals.

Conservative summary

At last week’s conference, the prime minister spoke about new council homes and more housebuilding. A major theme of May’s speech was the promise of a “British dream” for young people, strongly echoing Ed Miliband’s promise in 2014 to help them fulfil the “British dream” of home ownership.

May announced that she will meet the Conservative manifesto promise to renew the building of council and social housing, making £2billion available with plans to build an extra 12,500 homes for social rent each year in 2020 and 2021. Councils and housing associations will be able to bid for the money and provide certainty over future rent levels, with some homes being built for social rent below market levels.

This added to earlier announcements at the conference by Sajid Javid, the communities secretary, that he would extend ‘Help to Buy’ and give more protection to tenants.

However, housing experts, charities and rival politicians said the Tories proposed number of homes for social rent was far too low, pointing out that 1.2 million households were on council waiting lists in the UK and in London, 230,000 households on the waiting lists.

Housing expert Anna Minton, the author of Big Capital: Who is London for? told the Evening Standard: “It’s laughable. It doesn’t even begin to approach the scale of the problem.

“By plugging this announcement the urgent need to build social housing is acknowledged but there is no chance that a pathetic 12,500 new homes a year will make any difference to the worst housing crisis in modern times.”

Although the extra money was welcomed by the housing and homeslessness charity, Shelter, it warned the government there was still a long way to go.

Polly Neate, CEO of Shelter, said: “All new money is welcome, but the reality is that with over 1.2 million households on waiting lists already, this is only a fraction of the long-term investment required. It will need to be the start, rather than the end.”

Labour summary

Labour said the Conservatives’ policy “paled into insignificance” when compared to its own plans to launch the biggest council housebuilding programme for 30 years, which Jeremy Corbyn revealed at the party’s conference in Brighton.

One of the main points raised by the opposition leader was the proposition of tenant ballots for regeneration, which is what caused the biggest stir in the sector. While opponents of estate regeneration had cause for celebration, there was also concern among those who carry it out – including that of some Labour councils in London.

Labour sources have made it clear, however, that the policy is not meant to apply to existing regeneration schemes being carried out by Labour councils. It would come in only under a Labour government, which would provide the necessary funding and powers to make more attractive offers to existing tenants.

The second major issue raised by Mr Corbyn was to do with rent controls, although he has been vague in his support of this. The precise detail of the rent controls Labour intends to introduce is still largely unclear, but it is believed the party plans to go beyond what was proposed in the 2017 manifesto, which were mandatory three-year tenancies with a cap on rent increases in this period at inflation.

Rent controls can harm supply by encouraging landlords to sell rather than rent, and so for the policy to work, Labour will need to keep their promises to increase council house building, with measures such as lifting the Housing Revenue Account (HRA) borrowing cap.

However, Trevor Abrahmsohn, managing director of north London estate agents, Glentree Estates, is pessimistic about the state of the housing sector if Corbyn is to head the next government, believing that: “potential landlords will ‘dump’ their buy-to-let properties, driven by the fear of negative equity and higher holding costs.”

“This will curtail the supply of the private rental sector and as sure as ‘eggs are eggs’, rents could rise exponentially rendering the most vulnerable, affordable groups worse off than at present,” he adds.

Furthermore, Mr Abrahmsohn believes Labour will likely oversee a plummet in residential property values, particularly those in the capital above the £900,000 threshold, “where sellers will out number buyers and liquidity will come to a halt.”

He also believes multi-national companies, who have been lured to the UK by the low corporation tax environment, will leave at the prospect of more hostile tax raises, which would be “the worst possible moment for this to happen to the country, in the post Brexit era.”

Lastly, Labour spoke of a social housing review, parallel to that of the Conservative’s big announcement that the government is starting work on a Social Housing Green Paper. This may well be a good thing, helping to instigate consensual politics, which may allow the two parties’ proposals to be compared and examined, forcing the Tories to make more radical suggestions than they might otherwise have considered.

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