GE 2015: Housebuilding targets in party manifestos – raising more questions than they answer

Antonia Layard, Professor of Law

Antonia Layard, Professor of Law

One thing the parties agree on is that we need more houses. The quality of this housing has rarely been mentioned in the election debates and housing consumption – driven by social trends including increased divorce, an aging population and second home ownership – is positively taboo. Housing supply, however, and how to increase it, is central.

Each party has a housebuilding target. The Lib Dems suggest 300,000 a year; Labour pledged 200,000 homes a year by 2020 and have recently upped this target, to say that they will start building 1 million houses by 2020; the Conservatives don’t have a global number but have pledged 275,000 affordable homes by 2020, 200,000 starter homes and funding for housing zones, which will create 95,000 new homes; UKIP propose 1 million homes by 2025 on brownfield sites; while the Green Party would build 500,000 social rented homes by 2020.

What is conspicuously absent in each of these pledges is concrete machinery to reach these numbers. The Liberal Democrats are explicit about this. Their 300,000 figure is a target. They don’t have a plan yet, but have pledged to publish a long-term plan that sets out how the goal will be achieved in “the first year of the next Parliament”.

This matters because current housebuilding completions are nowhere near this target. The most recent statistics revealed that 137,010 houses were completed in the 12 months to December 2014, up by 10% on the year before, and up by 54,000 from the 2010 trough of 83,000. Yet this is still 39% – below the March quarter 2007 peak. And strikingly, the December quarter of 2014 saw only 29,800 seasonally adjusted housebuilding starts in England, 10% down on the previous quarter.

This less-than-impressive rate of new construction is taking place against a background of growing support for new housing. A recent Social Attitudes Survey saw 56% of those questioned saying that they would support new housebuilding in their area, up 28 points from 2010. Similarly, even in times of apparent austerity, there appears to be quite significant support for “borrowing to build”, particularly amongst renters and in London.

And yet, housing supply is still not appearing. Why not? The most contentious question is always where to build. Land availability is a key issue. While Labour nod to restrictions on “land banking”, the Tories have not mentioned their newly introduced “right to contest”, nor their schemes selling off public land, which has already raised £1.4bn in capital receipts. The one mention in the Conservative manifesto is to say that local authorities will get at least 10% stake in public sector land sales in their area. It is perhaps not surprising that selling public land and assets, with receipts going into central coffers, is not necessarily something to be emphasized in the manifesto. Yet it might address the perceived “land shortage”, if sites for the estimated 100,000 houses can indeed be realized as the Government have claimed.

Even then, however, local resistance can still slow down building and this is obliquely tackled in the manifestos. While only the Greens suggest encouraging housing developments across England and Wales to ease the pressure in South East of England, several manifestos reveal proposals that are often geographically separated. They allocate new housing (of whatever type) to specific sites, including housing zones (Conservatives); garden cities (Labour and the Liberal Democrats); and brownfield sites (UKIP). Conversely, the Conservatives, Liberal Democrats and UKIP are all very clear on their commitment to protecting the Green Belt.

This tactic can be explained by the electoral power of homeowners. One of the great societal shifts has been a rise in owner-occupation (from 23% of households in 1918 to a figure of around 64% today, declining from 68% in 2001). NIMBY-attitudes and support for tight planning controls, especially in greenbelts, has been one reason for reduced housebuilding. There is an assumption that increased housing reduces social amenity and the economic value of existing homeowners’ properties. Protection of the green belt is popular amongst voters outside of urban areas.

There seems, however, to be another major reason for the lack of housebuilding though, and on this the manifestos have less to say. Some economists have suggested that this might be because to maintain profitability, in line with their current organisational structures, the few housebuilding companies that are left have little incentive to radically increase production.  Producing more housing does not necessarily promote profitability. Such observations are increasing, leading to a growing commitment to diversifying the sources of housing supply.

Yet, this is not evident in the manifestos. We might, for example, have expected significant Labour policies here given the legacy of the 1930s housebuilding peak when 290,000 new homes were built including 60,000 a year built by local authorities (albeit many were replacements for demolitions). Instead, drawing largely on the 2014 Lyons Review, Labour suggest only that they will “get the public sector building again” but say only that they will do this by “prioritising capital investment for housing and by reforming the council house financing system”. There is no detail here.

Admittedly, this is marginally more than the Conservatives or the Liberal Democrats are saying. The Tories merely suggest that housing associations (with the profits from their proposed right-to-buy extension) should engage in new housebuilding. They do not mention housebuilding by Councils at all. The Lib Dems meanwhile say that they will encourage affordable housing providers, both Councils and Housing Associations, “to innovate”. Again, the proposal is short on details. Even though it seems to be widely agreed that the private sector cannot deliver the new houses we need, there are no concrete proposals for how Councils, Housing Associations or the third sector might radically increase production instead.

What then for the approximately 11 million renters? Waiting lists for social housing, spiraling housing benefit costs, homelessness and bed and breakfast housing are barely mentioned (Labour’s claim here is the best). Yet tenure, specifically the balance between freehold and leasehold – owning and renting – has been a recurring theme. The Conservatives promise 10,000 homes to rent at below market price while occupiers save for a deposit, with no indication of the mechanics of how this would be achieved.

The Conservatives have, of course, proposed a “tenure switch” – from rental to ownership – in their extension of the “right to buy” to Housing Associations for the lucky 500,000 (800,000 housing association tenants who transferred from being council tenants already have this right). This buys into the perceived wisdom that homeowners are more likely to vote (though not all agree).

Labour, meanwhile, have focused more explicitly on renters, have pledged that they “will legislate to make three-year tenancies the norm, with a ceiling on excessive rent rises” as well as having a register of private sector landlords and banning “unfair” letting fees (over £600). This is clearly an issue that is gaining traction, even though the Lib Dems appear to be somewhat torn on the issue.

Then we come to the promises by sub-group. These include the young: the Conservatives’ Starter Homes would only be available to the under 40s and housing benefit would be withdrawn for most 19-21 year olds (though the Greens would keep the benefit for the under-25s); UK citizens, only they would be entitled to UKIP’s stamp duty discount; and the (asset) rich, only they would be affected Labour’s mansion tax.

Perhaps the most intriguing sub-group of all are “the local”, with the implicit suggestion of “local homes for local people”. This is proposed by Labour who propose that first-time buyers who have lived in an area for more than three years will be given “first call” on up to half of homes built in areas of housing growth (left undefined). The suggestion has echoes the Conservative Home (but not the Conservative’s) call for “pro-ownership planning”, which didn’t make it into the manifesto (but is echoed in Ed Miliband’s recent “dream of home ownership” speech). The Tories meanwhile have reaffirmed their commitment to individuals’ right to build, which they say will require councils to allocate land to local people to build or commission their own home. There are remnants of localism here from the last election, but very pale.

Lastly, while the word “affordable” is used 78 times in the manifestos for housing, energy, childcare and transport (Conservatives 11, Lib Dems 23, Labour 6, Greens 23, UKIP 15) none of the parties explain what they mean by the term.

@antonialayard

The views expressed here are personal views and do not reflect the views of the funders of our research.

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