Experts discuss whether Labour could turn the housing market around
It is no secret that the UK’s housing market is suffering with too few homes available, and those available homes often being far too costly, especially for first-time buyers trying to get their feet on the property ladder.
Successive governments have promised to tackle the housing crisis - some have proposed concrete measures to do so and, back in 2017, Theresa May declared it her ‘personal mission’ to solve the UK’s housing crisis by turbo-charging new homes’ delivery. During Philip Hammond’s Budget in November that year, the government announced its target to build 300,000 new homes a year, but those targets were never met.
The National House Building Council recorded a total of 139,000 new homes completed in 2021, up from 115,000 in 2020 but down from 150,000 in 2019; the targets were eventually dropped by Housing Secretary Michael Gove late last year.
“However, with the prospect of the Labour Party on track for a landslide victory at next year’s general election, what should housebuilders expect and what should we all expect for the residential property market,” questioned David Alcock (pictured), managing director at Blend.
Five missions for Labour
“Keir Starmer has set out the five missions forming the backbone of the Labour party’s 2024 manifesto, and has vowed to back the builders not blockers by giving local authorities more power to build more homes on green belt land,” Alcock said.
Alcock added that Starmer has also pledged to bring back housing targets if the Labour party wins at the next general election.
According to the Labour party’s ‘five missions for a better Britain’ policy document, plans would involve helping first-time buyers on to the housing ladder and building more affordable homes by reforming planning rules and introducing new protections for renters.
“So, if we are to go by Keir Starmer’s public declarations, a Labour government might be just what the housing market needs to find a way out of its current deadlock and bring in hope for homebuyers,” Alcock said.
Planning system reform pledge
The Labour leader, Alcock said, has delighted housebuilders by confirming that his government would reinstate the requirement for a mandatory five-year land supply, and by committing to giving local authorities more power to build on the green belt in order to provide enough housing to satisfy demand on their patch.
Labour’s Shadow Secretary of State for Levelling Up, Housing, Communities and Local Government Lisa Nandy has said that tackling the housing crisis is central to growth, and that the next Labour government will rebalance homeownership towards first-time buyers, rebuild council housing stock and bring homes back into the ownership of local councils and communities.
However, Alcock believes, more importantly, the Labour leader has identified current inefficiencies in the planning system.
“Keir Starmer has promised to focus discussions on identifying the vested interests which need to be overcome to achieve this mission, especially on issues like planning reform, and to make planning reform a central part of the Labour government’s growth agenda,” he said.
Alcock believes the next few months will be crucial, and he added that whichever party takes control for the next term, promises made over the coming months need to be kept - unlocking the planning process, encouraging and supporting SME developers to get building again and helping the nation to get a foothold on the property ladder.
Renters’ Reform Bill
Meanwhile, Alcock said the Conservative Party has put all its eggs in the Renters’ Reform Bill basket, with a number of changes expected imminently.
“Its June whitepaper titled ‘A fairer private rented sector’ outlines proposals to abolish Section 21, shift all tenancies to periodic, and introduce new standards to the rental sector,” he said.
When it comes to helping first-time buyers, Rishi Sunak has revealed that he is considering reinstating the Help to Buy scheme to help first-time buyers get on the property ladder. However, Alcock added that some say this will simply inflate property prices more, negating the effect of the subsidy.
Rohit Kohli, operations director at The Mortgage Stop, said the Renters’ Reform Bill is a step towards addressing the UK’s housing crisis.
“The proposed abolition of Section 21 and shift to periodic tenancies will provide greater security for tenants,” he added.
However, Kohli said a streamlined process for reasonable evictions is necessary to avoid lengthy legal proceedings.
The introduction of the Decent Homes Standard for private rentals, he believes, will improve living conditions and potentially increase property values. Landlords, especially those with buy-to-let mortgages, Kohli said, will need to ensure their properties meet these standards or risk lower prices.
“The introduction of a private rented sector ombudsman is a positive move, but it must be adequately funded and empowered to make a difference,” he added.
While Kohli believes the bill is a step in the right direction, he said it could have gone further in regulating the housing market as a whole, including estate agent practices.
“The bill’s success will depend on how much funding will be available and the commitment to addressing broader housing sector issues,” Kohli added.
Do you believe the Labour party could do a better job in improving the housing crisis in the UK? Let us know in the comment section below.
