Building Britain?

Aurora Horwood

With more and more working people forced to claim housing benefit every day, as rents rise and the housing shortfall intensifies, the leading political parties are all vying to be seen as having the best solution to this national problem. But who has the right answer?

The UK housing shortfall is a serious and growing problem, and should be a priority for all parties. It is not just important because much of the UK population is unable to gain a foothold on the property ladder, but because we are now at the stage where soaring rents are forcing office workers and others who would never normally need to, onto benefits. The National Housing Federation’s Home Truths report has revealed that one employed person is forced to claim housing benefit every five minutes because of rising costs, with the number of working people claiming for housing benefits having risen by an extraordinary 104% since 2009, costing the tax payer an extra £12.1 bn.
Providing much needed new housing, and particularly affordable housing, has been a challenge that successive governments on both sides of the political spectrum have failed to address. However, it looks as though the Labour Party is really seeking to turn this into an election issue in the lead up to 2015. Ed Miliband’s speech on Labour’s plans to boost house building last week highlighted the Coalition’s poor record in this area. With house building at its lowest level since the 1920s, Miliband argued that the housing shortfall is something the current Government has largely neglected. At precisely the time when more homes should be built, numbers are falling – just 107,000 new homes were built in 2012/13, 10% less than in 2009.
Of course, the Conservatives are also keenly aware of the dearth of housing. During his talk on ‘The Future of London in the UK’ earlier this month, Boris Johnson noted the capital’s soaring population, and even remarked that the “single biggest cause of economic inefficiency” in London is the difficulty its workers face in living close to their workplace. Yet, many critics noted he spent more time on what’s been described as another of his ‘vanity projects’, the Garden Bridge “with no purpose”, than explaining how he would actually go about helping to increase London’s housing stock.
Given that current house building rates are at half the level needed to meet demand, the Coalition needs to do more. However, George Osborne’s Autumn Statement has been criticised by many in the housebuilding sector for failing to do enough. Measures were described as ‘meagre’; a rise in the borrowing caps for local authorities, and a £1 billion fund over six years for infrastructure to help restart stalled sites have left housing bodies unimpressed. The £1bn will aid the delivery of 250,000 homes, but given that the NHF has stated it is necessary to build 240,000 homes a year alone just to meet demand, something more potent is surely necessary.
With ‘help to buy’, the government has undoubtedly helped many people buy homes, but the scheme will only be of true benefit if is matched with building more affordable properties. With the Office for Budget Responsibility predicting that house prices will rise by 27 per cent between next year and 2018, the lack of supply will only accelerate this, potentially hindering many from being able to afford homes who are already struggling with stagnant wages and rising costs caused by inflation. Labour will seek to play on this in the lead up to 2015 and the Conservatives will need to find a stronger narrative than they have at present to counter it.
It is unclear whether “right to grow” councils, Treasury guarantees for new towns, or reforming finance rules to facilitate the construction of more council housing will be the tonic necessary to solve the housing shortfall. That is what the Lyons Housing Review – an independent Review being carried out by Sir Michael Lyons – will set out to determine. Whether or not these policies actually produce the 200,000 new homes per annum that is broadly considered necessary to meet current and future demand, the case remains that Labour has a better recent record on house building – since 2010 an average of 403 social and affordable homes have been built in Labour council areas compared with 201 in Conservative-run authorities.
It seems then that Labour has taken the initiative in positioning itself as best placed to stem the housing crisis, and by making the need to increase the rate of house building a key theme of his leadership, Ed Miliband is finally setting out a clearer vision of just what ‘One Nation Labour’ actually stands for. Moreover, perhaps this will guarantee that housing is a key priority for all parties, so that whichever party is elected in 2015, owning a home will not end up becoming a luxury available only to the wealthy. Either way, Britain needs to start building, now.

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