Drawing battle lines

While the Labour Party’s new positioning and policies are evolving daily since the election of Jeremy Corbyn as leader, it is clear that housing will be centre stage.

In promising at their conference that solving the housing crisis is their “top priority” with a very large and active housebuilding programme to include 100,000 new “public” houses, the main philosophical and economic battle lines have been drawn.

Speaking at this year’s Labour Party fringe was a voyage into a greater unknown than previous years. Many of the carefully researched arguments and far reaching conclusions and recommendations of the previous Labour leadership’s Lyons review seemed far away, and there is clearly much to do for the party to set out and reaffirm its full response to the housing crisis.

With underlying themes of inequality, injustice, eliminating poverty, homelessness and the need for “kinder politics” coming to the fore however, it is clear that housing will become the focal point around which many of these themes will play out.

So while Mr Corbyn states that “there is no answer at all to this housing crisis that does not start with a new, active [social] housing programme,” the government, through wider Right to Buy policies, the much heralded Starter Homes programme, and a drive to lower housing benefit costs by reducing social housing rents and the tax incentives of private landlords, is decisively stepping out on a radically different course.

There was much unhappiness at the Labour conference at the prospect of registered providers entering into a voluntary Right to Buy arrangement with the government

There was much unhappiness at the Labour conference at the prospect of registered providers entering into a voluntary Right to Buy arrangement with the government. Such an arrangement removed overnight the need for any related primary legislation to be debated in the House of Commons. There remains a strong conviction that selling social houses will only reduce the capacity for London in particular to meet the future housing needs of its poorer constituents. This is given added weight by last week’s reports that the homelessness crisis is spilling into the home counties, where private rents are still cheaper than within the capital and where London councils are now seeking to rehouse their homeless residents.

Not all areas of policy are divergent however. It appears that both Labour and the Conservatives have taken a negative view of the extent of buy-to-let property and the private rental sector. Shadow chancellor John McDonnell has called for controls on exorbitant rents and George Osborne has concluded that it is unfair that landlords enjoy tax perks denied to owner-occupiers (albeit they are subject to capital gains tax which owner-occupiers are not).

Neither are comfortable with the level of overseas capital being invested in UK housing. However, this is not an easy trend to counteract without undermining both the free flow of capital across the world in the wider sense, and specifically some of the largest regeneration schemes which are being underpinned by overseas investment. At a time when the private rented sector has a growing role to play in housing the nation, however, it is to be hoped that such common ground does not lead to a pressure for over aggressive regulation and fiscal disincentives such that the fledgling institutional Build to Rent sector is undermined.

It will be interesting to see how the government responds to the new rhetoric and greater left of centre positioning of the Labour party. A further move to right, or a gradual move into the potentially fertile middle ground, where Labour could become vulnerable? What is clear, however, is that the government continues to see increased home ownership as a major plank of its drive to solve the housing crisis, creating clear blue water between the approaches of the two parties.

Chris Tinker is executive board director and regeneration chairman at Crest Nicholson