Both the Labour and Conservative parties have put housing at the heart of their manifestos. However, while Labour hopes to woo voters with affordable homes paid for from the public purse, the Tories are cosying up to the private sector to keep their dream of home ownership alive.
While Labour would beef up councils to build 100,000 council houses a year, the Tories would engineer policies that would coax the private sector into building a million homes by 2024; both parties have blithely ignored the obstacles which have thwarted the housebuilding sector for decades.
Jeremy Corbyn plans to move the state into the housebuilding sector, while Boris Johnson would incentivise the private sector to deliver the 1 million homes he’s casually promised. So, what exactly are both parties pledging, and can it be done?
Jeremy Corbyn says he will:
- Build 100,000 council houses a year
- Council houses will be paid for with public money, which councils banking the rent.
- Build 50,000 “genuinely affordable homes”, scrapping the current definition of affordable and replacing it with one linked to local incomes.
It’s been exactly 100 years since the Addison Act was passed to build council houses on a grand scale. Since then, there have been very few governments who have seen anywhere close to 100,000 council houses built. Last year, just 6,287 were built.
Labour and the Tories frequently quarrel over which government has built the most council houses, but the figure has been pitiful for a good 40 years. Labour has earmarked £75bn for his social housing revolution, however where that £75bn will come from is shrouded in political rhetoric.
While local councils have long campaigned for more housebuilding powers, they face the same challenges as the private sector in sourcing skills, land and battling through an outdated planning system.
Dave Sheridan, Executive Chairman at ilke Homes, said: “With Labour and the Tories going head-to-head on housing policy this morning, it’s evident that there is a political appetite to get Britain building and deliver housing across a variety of tenures. However, delivering those ambitions will need a step-change in how we approach construction, as traditional methods are clearly not delivering at the volume we need.
“Building more homes for all tenures has cross-party support, but with the government’s long-term targets of building 300,000 new homes a year still to be met, an innovative change in strategy is now crucial. Scaling-up modern methods of construction will be fundamental to the next government’s success, ensuring that we can deliver high-quality, sustainable homes ready for 21st century living.”
Boris Johnson says he will:
- Overhaul the planning system
- Engineer policies that would encourage the private sector to build more homes
- Introduce a new mortgage with long-term fixed rates which only need a 5% deposit
- create a scheme where local first-time buyers will be able to get a 30% discount on new homes in their area.
Relaxing the affordability rules for mortgages is risky business and goes directly against the Bank of England’s advice. The subprime crisis seems to be a distant memory, but encouraging people to move out of expensive and insecure rental accommodation and into a property they can’t afford seems an odd logic, and begs the question if homeownership should come at all costs.
Vadim Toader, founder and CEO at Proportunity, a fintech startup offering Help to Buy-style loans, said: “Homeownership remains the aspiration of the majority of Brits and it is right the Conservatives are looking at new ways of getting people on the housing ladder but it’s vital any new proposals are in fact workable. It is difficult especially to see how either a lifetime fixed rate mortgage or 30% discount for first time buyers – effectively a right to buy on private property – would work in practice and it is telling the Tories are promising only a million homes when their target is 300,000 new homes a year.”
