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Rent to buy: the home ownership model with untapped potential?

The Levelling Up, Housing and Communities select committee is mid-way through an inquiry into shared ownership, which includes looking at the barriers to achieving full home ownership under the model and whether it is genuinely an affordable route to owning a home. Delve deeper into the terms of reference and it asks an interesting question: “are alternative schemes such as ‘Rent to Buy’ viable and do they offer more value for money?”

Rent to buy is not a new concept – the Coalition Government launched a £400m Rent to Buy scheme back in 2014 – but it has never really taken off in the way that other schemes to support first-time buyers have. From our experience on the ground, however, it feels like the tide is finally turning in favour of the tenure as more providers enter the market and an increasing number of local authorities adopt it as part of their housing mix. 

This is perhaps a result of increasing recognition that the model has the benefit of tackling two key problems at once: in the vast majority of cases it provides new affordable homes to rent, whilst also providing a realistic route to ownership.

The Government describes Rent to Buy as helping tenants to save for a deposit to buy a home by offering properties at a discounted rent, normally 20% less than market rent.

Historically, it has been seen as a ‘niche’ product and there has been limited availability of it across the country, perpetuating the lack of awareness of the offer. 

Now, with new entrants to the market, the sector is growing, but the challenge is that it is not homogenous. There are rent to buy products delivered by housing associations as part of their affordable rent provision; privately funded models that are included in local authorities’ affordable home ownership offer; and then rent to buy products that aren’t badged as affordable housing at all but are instead delivered as market homes. Muddying the waters further, the length of the rental period varies depending on the scheme – the 2014 scheme had a minimum of seven years renting, whilst the government website now states an initial rental agreement of just two. Some, like ours, offer a gifted deposit to add to renters’ savings, whereas others use the rental payments to count towards buying the property. This makes the sector hard to define in planning policy and confusing to navigate for local authorities, who are understandably wary of new providers in the market. Often, it is easier to stick to doing what they know. 

However, as the cost-of-living crisis continues to bite, it is an attractive offer for renters who are struggling to save for a deposit and meets a major need in the market. Importantly, we have seen that it can successfully turn renters into homeowners.

As Keir Starmer looks for tangible ways to deliver Labour’s commitment to becoming the party of home ownership, he would be wise to look at how he can support growth of the rent to buy sector. 

First and foremost, we know that saving for a deposit is one of the main challenges to getting on the housing ladder. In June, Zoopla found that the average deposit paid by a first-time buyer was £34,500, rising to £72,000 in the South East and over £144,000 in London.   

For those who can’t rely on the ‘bank of mum and dad’, the difficulty is that often there is very little money left to put aside after paying rent and other monthly bills. The English Housing Survey notes that half of renters – some 2 million households – don’t have any savings at all. This rises to three quarters of those in the social rented sector. 

This leads to a situation whereby the majority of first-time buyers come from the top two highest income groups, pricing out our nurses, teachers, retail and hospitality workers. This should not be the case. Workers across all income brackets should have a realistic prospect of being able to buy a home where they live. And we know that this is what they want; the aspiration to own has been constant at around 9 in 10 people for many years.   

Labour will not be able to increase levels of home ownership and social mobility unless it addresses the deposit barrier. Rent to buy models do this in a way that Shared Ownership does not, by enabling tenants to move into the home that they will one day own without having to pay a deposit upfront, and instead being given the time and support to save for this. 

The latest figures show that the average deposit for an initial equity stake under Shared Ownership was £20,800, putting it out of reach of the half of renters without savings. There is then the challenge of having to ‘staircase’ to full ownership, and the costs associated with this. Currently, comprehensive data on how many people reach full ownership and the time taken to do so does not exist, however, the House of Commons Library notes that the number of households staircasing to 100% in 2020-21 was equivalent to just 2.3% of all shared-equity homes owned by housing associations.

Homes England similarly does not collect post-sales information on grant-funded rent to buy homes; however under our model, 95% of renters have successfully become homeowners with a high street mortgage at the planned point. 

On the question of whether rent to buy offers good value for money, we and other privately funded providers have proven that it is possible to deliver affordable home ownership products entirely without grant. We are fully funded by institutional investment such as major UK pension funds, meaning that there is no cost to the public purse whatsoever. As well as bringing more funding to the sector overall, using private investment to deliver affordable home ownership products enables local authorities to direct their grant funding to deliver more social housing; a win-win. This is an avenue that the Party seems interested to pursue, as the NPF document outlines that Labour will “encourage more private investment, properly regulated, in new supply”. 

Rent to buy’s challenge is not that it is unviable, but that it has been small-scale and is not well known. With Help to Buy having ended, now is the time for it to be brought into the limelight and promoted as a major route to home ownership. Such a campaign from a future government would help boost local authority confidence and acceptance, encouraging more providers to the market and in turn increasing home ownership. 

In addition, whilst privately funded providers do not require government grant through the Affordable Homes Programme, one of the main challenges is that local authorities are often reluctant to accept providers that are not government funded due to uncertainty over their standing. A Homes England equity programme for the rent to buy market would help to provide local authorities with confidence that the models had government support and had been assessed for quality and viability.   

Following the G15 landlord Metropolitan Thames Valley Housing entering the rent to buy sector for the first time earlier this year, Inside Housing wrote: “Rent to Buy has been touted as a model that could replace shared ownership as the dominant affordable-ownership tenure.”

We believe that it can and that the Labour Party should be looking at how to make the most of its untapped potential. 

Steve Collins

Steve is the Chief Executive at Rentplus, and has worked for more than 25 years in both public & private housing and development sectors

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Poll Position

By comparison to 2022, this year has been rather steady, at least in terms of political polling. Britain Elects’ poll of polls tracker generates an average share across all published polls and recorded the Conservatives’ share as 26% on 2 January, 25% on 30 November. The equivalent figures for Labour were 47% and 44%.

Consistently strong leads in the polls and several stunning by-election results served to bolster the sense that the Labour Party is a government-in-waiting. According to Ipsos, nearly 2 in 3 Britons expect Labour to form the next government.  

Part of the reason for this is the damage wrought to the Conservative brand since 2019, particularly in terms of sound economic management. As a colleague has put it, the next election could well be a case of “better the devil you don’t know…”

Alongside this mainly repetitive pattern in headline voting intentions, there have been some important developments in public sentiment and discourse in relation to issues which look likely to feature at the next general election. 

One of these is housing – an issue which Bagehot, The Economist’s political columnist, identified as the starting point of “most problems in British politics”. He also framed the ‘Builders versus the Blockers’ conversation on housing this year, subsequently adopted by Keir Starmer and Lisa Nandy among others.

Here are ten features of public opinion in relation to housing, drawn from Ipsos polling on the topic this year.

1. Labour continues to perform well among mortgage holders, and owners.

This tenure has been the last remaining ‘bellwether’ tenure since Labour won over private renters in 2017. Across September to November, Labour’s share among mortgage holders was 47%, much improved on the estimated 33% it got in 2019. This matters because of the tenure’s voting power; mortgagors were 25% more likely than private renters to turn out to vote in 2019.

2. The public have a dim view of the Conservative’s record 

Just 18% of voters think the Conservatives are doing a good job at improving housing in Britain. Those who voted Tory in 2019 are more generous but, even among this group, just 29% were positive. Importantly, in June, three-quarters of Britons attributed rising mortgages to the government’s economic policies.

3. This translates into a strong Labour lead on the issue.

Asked which party has the best policies on housing, 40% say Labour, 14% the Conservatives (the party’s largest lead of 11 policy issues). No surprises really given this is the historical norm, but Labour had been trailing on the issue at the end of the 2000s.

4. Housing has become more salient in voters’ minds.

In 2005, on the eve of the general election, just 5% of people spontaneously mentioned housing among the most important issues facing the country. It simply wasn’t top-of-mind and its salience fell to similar levels during the pandemic having been 17% at the 2019 general election. Our last measure was 18%.

5. The housing crisis is local and global.

Ipsos found housing to be a top five issue determining the way people voted at May’s elections (ahead of immigration). While all housing is local, housing crises exist worldwide. A global study this year found new housing supply to be the top infrastructure investment priority (among 14 options) in Australia, Ireland, Canada, Chile, Germany, Netherlands, and Poland.

6. The housing crisis is an affordability crisis, especially for renters…

At the turn of the year, we found a third of private renters reported spending at least half of their personal monthly income on their rent. In May, we found half rated the availability of affordable properties to rent as a very serious problem. Social housing is also believed to be in short supply. 

7. Under-supply is seen as a political failing, but people matter too…

Overly restrictive planning features near the top among a list of reasons for the undersupply of housing but, in the public’s eyes, comes behind political disinterest and local opposition.

True to form, the same Ipsos polling found public support for new housebuilding to be very conditional on the detail and practicalities. The public are more ‘maybe’ than nimby or yimby, implying a need for astute local leadership on the issue.

8. Confidence is low…

Two-thirds lack confidence Britain will build enough homes in the future. Most people expect homelessness to get worse. Many aren’t sure that a change of government will make things better.

The public are bold on housing and supportive of action – this year we added provisions contained within the Renters Reform Bill to our list of rent caps, taxing second homes, and extending Right to Buy (yes, that) of popular policies. Above all, people want to see evidence of action because they haven’t seen much so far.

9. …but positivity is possible (and necessary).

Our research for Prince William and the Homewards initiative showed that facts, figures and case studies have the potential to shift perceptions into more positive territory. When people are shown that schemes like Housing First can make a sustainable difference to homelessness and can deliver savings and alleviate pressure on public services, they become more engaged and more encouraged that some progress is possible.

10. Don’t assume people are as interested as you!

In May, two in five Britons and a similar proportion of private renters said they had not heard of the Renters’ Reform Bill. And while private renters are widely recognized as having had the rawest deal from actions taken by the Conservative government in recent years, this group has the lowest propensity to vote.

This depends on the issue – in June, three-quarters of Britons said they were following news about rising interest rates very or fairly closely, a higher proportion than were following stories about public sector strikes and the war in Ukraine.

The next general election campaign will likely amplify, but also disrupt, what we’ve witnessed during 2023. As it is on much else, Labour may be in poll position on housing but the race isn’t won yet.

Ben Marshall

Ben is a Research Director at Ipsos UK and long-time commentator on public opinion and housing. He has managed for-policy research and evaluation projects for a range of clients including the Chartered Institute for Housing, Shelter, DWP, DLUHC, The Royal Foundation (supporting Homewards), Create Streets and The Economist.

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Forgotten Generation

“We are on our knees in terms of the housing crisis. I have worked in this sector for 35 years and this is the worst I have ever seen it”

 Fiona Fletcher-Smith, chair of the G15 group

To remedy what is already a catastrophe, we need to activate a national housebuilding programme to deliver the housing that the country needs now and into the future. It is only at this scale and by targeting the housing shortfall and needs of the country that we will stand a chance of providing the housing solutions this and future generations deserve.

Simply put, we need a lot of every type of housing, but mostly housing that is affordable, sustainable and secure. The housing we need is not being delivered due to a constrained planning environment, market conditions and funding complications. This is exacerbated by poor governmental leadership – 16 Housing Ministers in 13 years is not helpful. Institutes are unable to enact the measures needed due to being too risk averse and unable to support the affordable housing sector as they should.

Homeownership rates among 19-29 years olds fell by two-thirds over the period 1989 to 2013, from 23% to 8%. The housing shortage is also leading to an increased number of concealed households, with the number of adults living with their parents rising to 4.7 million in 2021, an increase of 700,000 compared with a decade earlier.

For younger people this is yet another setback in a long line of measures that are holding them back – lower relative incomes, rising housing costs and student loans. Not only is this having a significant impact on their short- and long-term life options, it also directly impacts on national productivity as younger people are held back in their careers due to their immobility.

In many areas of England, younger working people are often not eligible for, or are unable to secure, social rented homes. Due to a lack of affordable supply, home ownership or rental is beyond their financial reach too. 

Set against median incomes, we can see that most forms of affordable (intermediate) homes are out of reach to people under the age of 35. This pushes more and more people into living in overcrowded or inadequate homes.

Chart 1 – The chart above shows what households should be spending on housing costs (green bars) based on the latest ONS data for median incomes against what is charged (blue bars). The affordable threshold for housing cost is calculated at 40% of net income (London Plan), which is the criterion set for affordability. It is 30% of gross income (Manchester housing strategy). The housing costs above are taken from actual housing offers around London and represent typical costs. It clearly shows that for people on median or lower incomes, they must exceed allowances to afford a home.

The Government states that you can buy a home through shared ownership if both of the following are true:

  • your household income is £80,000 a year or less (£90,000 a year or less in London)
  • you cannot afford all of the deposit and mortgage payments for a home that meets your needs

Yet, there is a huge gap between incomes and housing costs. The median incomes for all people aged between 30 to 39 (2020 ONS), in England was £32,259 – dropping to £27,087 for women, who make up the nearly two thirds of people buying shared ownership homes. Even with London weighting, this is a far cry from what is needed to buy a Shared Ownership or Discounted Market home in London which require incomes above £48-63,000 as shown below. A report from UCL illustrates that over the last 7 years, the value of the staircased share has increased by 60% implying that shared ownership is becoming less affordable.

Chart 2 – Example of typical incomes required for Shared Ownership Homes in London.
Chart 3 – Example of typical incomes required for Discounted Market Sales Homes in London.

The result is that well over 50% of younger working people, regardless of their jobs, do not have access to any independent housing options – this is a terrible situation and it is only getting worse. We are not building enough homes and not the right types of homes either.

To overcome the disparity between income and cost, we need to greatly increase housebuilding. We need to look beyond housing types and focus more on whether they are actually affordable to people. Too many people are getting further into debt and spending far too much of their income on housing and energy rather than wellbeing and their prospects.

There are a number of housing models (discounted rents or fixed shared equity) that can ensure affordability, but we are not providing anywhere near enough of these homes. Affordable housing providers and Local Authorities, if given the right levels of support, funding and expertise, can make significant inroads into delivering the homes we need. All suppliers of affordable homes should be supported with access to appropriately priced land and funding.

With the right housing policies and structures in place we can deliver the homes we need that are affordable, safe and protect us from the climate. We need stability and a determination to resolve the housing crisis. We can then aim to make housing a human right and begin to address the shortcomings set in front of younger people.

Pieter Zitman is an affordable housing provider and champion. He recently founded a Bursary to support disadvantaged architecture students in South Africa.

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Community Energy for the Future

For too long, we’ve relied on energy produced and owned abroad – empowering oligarchs while multinational oil and gas companies make record profits all whilst our communities face higher bills which force them to make impossible decisions.

With prices reaching record highs, there has never been a more important moment to invest in cheap, clean renewable energy produced and owned right here in the UK.

At the Co-operative Party, we know that ownership matters. And that’s why we back community-owned energy, where local people own and control renewables like solar panels and wind farms that power their communities because we know that community energy organisations can play an instrumental role in tackling the crises the UK faces today – including the ongoing cost-of-living and energy crisis – the collective action taken by organisations has the unique ability to bring people together, to involve them in the project, allow them the opportunity to take control of assets and also, educate.

We know that many of the solutions to the energy crisis require a less centralised approach – ones which are owned locally and where communities can see the benefits. We are calling for a massive investment in community energy to deliver transformative change to the energy system, by building renewable energy capacity and putting communities in control.

Community energy schemes across the UK are empowering local people so they not only have more say on how energy is produced and where any profits are invested but they increase resilience and, in most cases, have more awareness of the key issues being felt locally meaning they are in a better position to adapt and support the most vulnerable members. 

Many of those community energy organisations also look at energy saving – educating their members and local people on what they can do to become more energy efficient. Co-operative networks of households, community organisations and businesses can be highly effective in engaging households and communities on energy saving and retrofit with them encouraging take-up as well as behavioural change. For many this is because of trust, these initiatives are owned and run by the community, which they know has the interests of that area at its heart. Unlike multinational corporate companies who rip off communities only to move on to the next one, local community energy organisations have the trust to support local people and bring about real change. 

And we know for many households across the country, the quality of housing can impact the cost of energy. With notoriously draughty, damp, and cold homes which are increasingly expensive to heat. It is estimated that 19 million homes in the UK fail to meet the basic energy efficiency standards. That is 19 million households who are paying higher bills, are potentially putting their health at risk from living with damp and cold and are unintentionally contributing to the climate emergency. 

Upgrading our homes through retrofitting is one of the best ways we can tackle the ongoing issues regarding energy consumption and efficiency. By ensuring buildings are properly insulated we can help reduce the cost of energy whilst future-proofing homes all while doing our bit for the climate.

Linking in what the idea that a key benefit of community energy companies is the trust they provide – Ireland’s home retrofit program tells us that establishing ‘one-stop-shops’ within communities is critical and can be the key factor in supporting local people to make these changes.

They can provide that advice, advocacy, and retrofit to make it happen. And it is important to remember when we talk about retrofitting, it is not always on the large scale such as full-house refit, in half an hour through low-cost measures you can save a household 10% of their energy use. 

Across the country, co-operatives like Retrofit Works, Carbon Co-op, and Loco Home are already in communities showing us how it can be done – educating local people and acting on retrofitting but we need one in every community. 

Recognising the difference local community energy companies and project are already making to areas is crucial but we want to see more of them up and down the country.

Making that a reality will take political will and resources – our sister party, the Labour Party’s proposed ‘Local Power Plan’ will prioritise expanding access to cheaper, cleaner power across the country through the creation of GB Energy which would allocate resources to support local power in partnership with communities and create a million new owners of energy in the UK.

At the Co-operative Party we are supporting that work and empowering our members to act locally to support the growth of community energy. Whether it is by contacting their local elected politicians to resource community energy or make it easier for projects to get off the ground, getting involved locally if they have schemes in their area or spreading the word of how community energy is already benefiting people and why it is important, we increase the accessibility of it.

Community energy has the power to tackle the crises we face as a society today – including the cost of living and climate change by providing cheaper and cleaner alternatives all whilst empowering local people and creating a more democratic way of working where people can see the benefits to the local economy.

Emma Hoddinott

Emma is the Assistant General Secretary of The Co-operative Party

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Wanted: A Long Term Plan for Home Energy Efficiency

Anthony lives in a 1970s bungalow owned by his local housing association in Greater Manchester.  His home was part of an energy efficiency pilot scheme, where the housing association installed solar panels, triple glazed windows, new doors and cavity wall insulation.  The retrofit works have brought his home up to Energy Performance Certificate B, which means, in energy performance terms, his 1970s bungalow is now pretty much good as new.

It’s clear from talking to Anthony – on a visit with his local Labour MP – that the work had made a real difference to him. Not just cost savings, but also the benefits to his health. He told us:

“The solar panels are great – some days the smart meter hardly moves and it’s keeping my payments down. The triple glazing is amazing; it’s so quiet now, where it was noisy before.
“Overall I feel like the heat stays in my house and I haven’t needed to have it on as much.
“This work has changed my life completely.”

You hear stories like Anthony’s whenever you visit residents who’ve benefitted from investment in the energy efficiency of their homes. And there’s an increasing number of them.  In a quiet revolution, housing associations and councils across England have spent the last few years piloting ways to make homes cosier and greener.  We’ve now got approaches that work in a range of circumstances; what we need is the support to roll these out to more homes.

That means a long-term plan for home energy efficiency.  The reason retrofit has never reached scale before is the stop-start, feast and famine approach to funding that consecutive Governments have adopted.

The Social Housing Decarbonisation Fund, which contributes to the cost of energy efficiency upgrades in council and housing association homes, is a good example. Last Autumn’s bidding round offered up to £800m of match-funding to councils and housing associations.  The round this Autumn is worth just £80m.  A welcome top-up, but not the long-term, predictable funding that councils and housing associations need.

Why do we need support from Government?  Simply, because the cost of energy efficiency works is huge. The housing association sector alone is planning to invest £70bn by 2050 in the fabric, heating systems and components of their existing homes. But fully decarbonising all housing association homes – vital to deliver on net zero ambitions like Labour’s green power mission – will cost at least a further £36bn.

Government support helps us fill that gap.  Every penny the Government invests in energy efficiency is a penny that doesn’t have to come out of budgets for much-needed new social housing.

And there’s consensus across our sector on what’s needed.  We want to see the current Government bring forward the balance of their pledged £3.8bn for social housing decarbonisation as soon as possible.  That would create the certainty our sector needs to continue their good work.

In the longer-term though, we need a much more ambitious plan to deliver energy efficiency improvements in social housing – and in other tenures, too.  There’s broad consensus across those working on greening our housing that a commitment of at least £6bn per year is what’s required to roll-out energy efficiency improvements at the scale needed to tackle our cost of living, energy security and climate change crises.

That’s why – at Labour Housing Group’s retrofit fringe in Liverpool – we were pleased to hear Shadow Minister for Clean Power and Consumers, Jeff Smith MP, reiterate Labour’s commitment to delivering a £6bn per annum warm homes plan by the end of a Labour Government’s first term.

Our homes are fundamental to our health and wellbeing. Decent and affordable homes like Anthony’s must be available for everyone, but right now they’re not.

The lack of a long-term plan for housing has led to the housing crisis we are living through today. The issues we face around housing are systemic. If we don’t act to fix the housing crisis, things will get much worse for people living in England.

A sustained commitment to funding energy efficiency works at scale is a vital part of the long-term plan for housing that we need.

Social housing has a retrofit model, we know what works, but we need the support to roll out that model at scale.  It can start in the social rented sector but moving quickly into the private rented sector, where standards are worst, and into the owner-occupied sector.

So we need support from all political parties to invest in energy efficiency.  It’s the biggest single thing parties can do to make sure that more people benefit from works like those to Anthony’s home; improvements that – in his words – have changed his life.

Rhys Moore

Rhys is the Executive Director of Public Impact at the National Housing Federation

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Tracy Harrison

Tracy is the Chief Executive of the Northern Housing Consortium

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The Home Straight

Housing and a generation of new towns was a big theme of the Labour leader’s conference speech this October — rightly so

The battle lines have been drawn. October’s party conference season has seen the Conservatives and Labour start to position themselves ahead of next year’s general election on issues such as climate change, economic growth, education, and public health. And, as YouGov’s Patrick English put it, Labour has gone “hard on housing.”

It would be wrong to judge a party conference solely on its leader’s speech, but these are big moments (although we shouldn’t overstate the extent to which they cut through with voters). While Rishi Sunak’s keynote didn’t cover housing — the Prime Minister and Michael Gove had set out a housing plan previously in July — it was front and centre of Keir Starmer’s.

The Labour leader described “bulldozing” through Britain’s sclerotic planning system (and reforming it) to get houses built. He also sought to reframe conception of the often-not-green belt, referring to its car parks and wasteland as the ‘grey belt’. This drew a clear dividing line with Sunak who had previously criticised Labour’s approach to housebuilding as threatening the “concretisation” of Britain.

Starmer said he would “over-ride” local opposition in the national interest although, in more sober rhetoric, subsequently described getting the “balance right” in the central-local dynamic.

Echoing colleague Rachel Reeves, Labour’s leader described siding with the ‘builders’ not the ‘blockers’ using the language of an influential column by Bagehot in The Economist (Duncan Robinson used Ben Ansell’s analysis which showed that support for housebuilding is concentrated in major centres of support for Labour and also, importantly, the Red Wall).

Housing is political gold for Labour for three reasons. First, voters already put it in front on the issue — the party has a 28-percentage-point lead according to Ipsos’ most recent measure (a year ago) — so it starts from a position of strength.

Second, it is a valence issue where there is broad consensus meaning competence matters – but the public is critical of the Conservative’s record on housing in government — and, third, an image one, allowing Labour to talk to personal and national aspiration as well as fairness and the ‘securonomics’ apparently at the core of its strategy.

But to ‘weaponise’ rather than ‘neutralise’ housing as an issue, Labour must continue to increase its salience — just as the Conservatives have done this year with immigration — drawing out points of difference and cutting through apathy. The issue isn’t top-of-mind for enough people and has historically featured well down the list of vote-shaping considerations at general elections. When the going gets tough, and it usually does with delivering housing, even the tough don’t get going.

The premise for a step change in housebuilding isn’t as keenly felt by the public locally as it is nationally. While most people link insufficient supply with affordability, many don’t. Opinion is more ‘maybe’ than nimby or yimby. The why and what of building new homes are just as important to people as the where and how many?

Another challenge is that people are cynical about prospects for improvement. For example, Ipsos has found people putting political disinterest as the number one reason for the under-supply of housing, slightly ahead of local opposition with the restrictive planning system further behind.

On the face of it, both parties would subscribe to the Liberal Democrat’s position of building “the right homes in the right places”. Both support the reform of planning and further building. Labour’s 1.5 million homes in 5 years is similar in number to the Government’s current target. There appears to be consensus in the form of ‘gentle densification’, the use of design codes and standards, and behind the Renters’ (Reform) Bill.

In Manchester, Michael Gove announced just over £1 billion committed to 55 towns to be spent over 10 years, but it was Starmer’s new towns that was more eye-catching and potentially politically smart. When Gove reaffirmed the Conservatives commitment to housebuilding, some said that his strategy was to build in Labour’s backyard (with the exception of Cambridge) to assuage the concerns of Tory-leaning voters. Labour’s plan to build new towns would involve creating whole new backyards!

This is probably the reason why YouGov found 53% of Britons supporting ‘new town-sized settlements in areas with significant unmet housing need’ last week. Similarly, nine years ago, a survey for Lord Wolfson whose economic prize that year selected the best idea for building a garden city, found just 13% would oppose new garden cities. Little wonder though given the way these were presented to respondents in the survey!

There are considerable ifs, buts and maybes associated with building new settlements. But that doesn’t matter for now. At this stage, Labour is looking to boldly bring solidity to its pitch to voters that it has realistic ideas to fix and change Britain and will do things differently. It is asking questions of the Tories, of those involved in housing, of voters, and also of itself.

It’s too early for Labour to “go back to [its] constituencies and prepare for government”. But with potentially 6–12 months left before the election, it’s not premature to build on the progress it made at conference this week and prepare the detail of a plan for genuinely improving housing.

‘The home straight’ first featured on Ben’s blog: https://benm77.medium.com/ 

Ben Marshall

Ben Marshall is a Research Director at Ipsos UK and long-time commentator on public opinion and housing. He has managed for-policy research and evaluation projects for a range of clients including the Chartered Institute for Housing, Shelter, DWP, DLUHC, The Royal Foundation (supporting Homewards), Create Streets and The Economist.

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We Need to End National-Grid Lock

There are two existential threats to our country’s future: tackling the climate emergency and fixing Britain’s housing crisis. Future generations will not look kindly on us if we let these two systemic issues run on unresolved for another decade. They might seem like two distinct challenges, but they’re connected by one key piece of infrastructure: the National Grid.

Two Critical Priorities: Housing & Energy

In my hometown of Bracknell, the previous Tory council oversaw anaemic house building. Last year, only 390 houses were built. The situation for social and affordable housing is far worse. From 2017 to 2022, Bracknell Forest built only 8 homes for social rent. Meanwhile, 1,690 families are stuck on the council’s housing waitlist. 1.2 million families are on waiting lists throughout England.

Now, with a Labour council leading Bracknell since the local elections, there is real hope for change. But grappling the housing crisis requires national, as well as local leadership. And with a Tory government crippled by NIMBY activists in its own ranks, it is clear Rishi Sunak has no leadership to give on the issue.

Nationally, Labour has set forth a bold set of proposals to get Britain building, including reforming planning laws and putting an end to so-called “hope value” blocking public procurement.

Energy policy also requires both local and national leadership. Labour has ambitious plans to retrofit and insulate existing housing stock, to make it more energy efficient, and they will create GB Energy, a publicly-owned energy company focused on renewables.

At a local level, it is great to see Labour embracing co-operative and community energy schemes, which will empower communities and drive local economic growth.

Unlocking Grid Capacity

Tackling both climate change and the housing crisis require us to face up to a significant challenge.  The capacity of the National Grid is far too low, and creating new connections takes far too long. Any new house puts increased strain on the electricity grid; only compounded by the transition to electric cars, heat pumps and other green technologies. And new onshore wind farms and solar panels need to be actually connected to the grid if they’re going to help us reach Net Zero by 2050.

John Pettigrew, the Chief Executive of the National Grid, has said that “we will need to build about seven times as much infrastructure in the next seven or eight years than we built in the last 32”. Strategic planners have suggested the grid needs £54 billion of investment to meet green goals.

Housing projects are already being delayed or rejected because of local shortfalls in National Grid connectivity. The National Grid currently operates a first-come-first-served system for connecting new projects, which means any delays have a knock-on effect – and ready-to-go projects are facing years-long delays.

One problem is that expanding the National Grid to build more homes also requires planning permission. And just as house building can attract local controversy, so too can projects to expand the grid. An incoming Labour government needs to be ready for this.

The other major issue is, of course, money. That’s why it’s so welcome to see Labour committing to spend £28 billion on green investment by the mid-point of next parliament. A proportion of that will need to be spent on upgrading the National Grid.

As Keir Starmer said when unveiling Labour’s green agenda, “we’ve got to roll up our sleeves and start building things and run towards the barriers – the planning system, the skills shortages, the investor confidence, the grid.”

Only a Labour Government can show the leadership we need to end a National Grid-lock.

Peter Swallow

Peter Swallow is Chair of Ealing Central and Acton CLP and a researcher at Durham University

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Making the Moral Argument for Housing

Let’s start with first principles: housing is a fundamental human right. A right so central, so  fundamental, that it intersects with all others. An inalienable and essential need enshrined in  moral and natural law – though not yet in the statute books. Without it, all else suffers;  educational outcomes fall, inequality worsens, psychological and physical health  deteriorates, and human potential is capped and even drained. As Hashi Mohamed  beautifully puts in his book A Home of One’s Own, having secure and dignified housing  “allows the mind and soul to wander to more important matters; the growth of one’s  personality, the ability to dream and desire.”1It is the basic human need for shelter, without  which all other needs cannot be meaningfully met. 

We have all seen the figures that illustrate the scale of the problem. Over 100,000  households now in temporary accommodation, 64,940 of those with children. As of the start  of 2023, over 1.2 million households on local authority waiting lists, the true numbers of  those in need likely far higher. And underlying these statistics, the daily human tragedies that  flow endlessly from the national emergency that is the housing crisis. 

As a councillor in an inner-city London borough I have come face-to-face with the  desperation and devastation faced by those in desperate need, as well as the uncertainty  and anxiety of young people with no hope of laying down roots. Like many of us, I have also  personally faced the soul-destroying horror of housing insecurity and eviction – and the  displacement that comes with it. 

If we accept the truly destructive nature of the housing crisis across all metrics, and accept  that housing is a human right, the next question surely must be: will we do whatever is  necessary to fix it? Not for the sake of it, but because this is a matter of social and moral  justice. Holding our principles front of mind and recognising that the housing crisis is not just  a headline, we have no choice but to be bolder. Put simply, we as a Labour movement have  an ethical, not just practical, duty to be fearless in our efforts. 

Firstly, we have to slay some common myths on the progressive side of politics, namely that  we can fix the housing crisis simply by filling vacant homes (whether they belong to overseas  investors or not) and by building solely on brownfield sites in existing urban centres. I know  why these are common arguments – I understand why they are attractive fantasies. We care  deeply about inequality and reject the commodification of housing, recognising the  unsustainability and immorality of the notion of homes lying vacant during a housing crisis,  and we embrace our role as custodians of the environment, preferring to limit the impact of  human existence on nature

But as is often the case, these fantasies are the waking dreams that risk distracting us from  the real work required. The facts are sobering. The UK has the lowest long-term vacancy  rate in Europe, bar Poland, at just 1.1% of the total housing stock– a mere drop in the water. Building to full capacity on all the brownfield sites in the entire country would only  deliver 31% of the homes needed– a significant, but ultimately inadequate, amount. 

While no option should be taken off the table, it is clear these approaches taken in isolation  are not enough. Facing an estimated 4.3 million home deficit, only more radical, progressive  solutions will end the injustice and suffering faced by so many. 

Take the Green Belt, imagined by many as a noble, pristine ring embracing our cities while  in fact acting as a semi-industrial chokehold throttling supply. Here we have an opportunity  to make a radical, and observably true, argument – the Green Belt isn’t really green at all,  and has very little to do with the environment. It does not exist to preserve England’s green  and pleasant land but to restrict urban growth, and is already largely built upon with light  industry and low-density housing. It is estimated we could fill the entire 4.3 million home gap  by just building densely on under 6% of the Green Belt, if taken as the only solution.  Counter-intuitively, this would then have the effect of limiting urban sprawl and allowing us to  preserve and re-wild our actual natural landscapes. 

Or we can look to the related work of architect Russell Curtis, whose research has  concluded that we could provide 1.2 million homes by building solely around rural train  stations, where the transport infrastructure already exists. The knock-on benefits of this for  the economy and reducing reliance on cars are obvious, and would also require less new  infrastructure to be built. 

No argument about solving the housing crisis and fixing supply should ignore the need for  wider planning reform, though, beyond re-designation of the Green Belt and other measures – as long as our planning regime operates on a case-by-case, discretionary model, as laid  out in the Town and Country Planning Act 1947, achieving the levels of supply required may  be prohibitively difficult. Our approach should therefore include a recognition of the need to  overhaul the system as it currently stands and embrace the radicalism that makes us  Labour: when systems are no longer fit for purpose, we build new ones. 

When those outside the Labour movement, or our political opponents, make similar  arguments about acting boldly to fix the housing crisis, they make them largely on the basis  of practical and economic necessity. Our movement has the opportunity, and the  responsibility, to make them with the moral necessity in mind and, while we do not have a  monopoly on morality, we must remember the reason we exist – to redress these injustices. 

It is why the Labour Housing Group and Labour Campaign for Human Rights came together  to clearly say “Housing is a Human Right”, bringing together housing and human rights  practitioners, and why our conference motion calls for housing to be front and centre of the  party’s campaigns. 

The housing crisis is a catastrophe affecting all strata of society; young people forced into  HMOs and limiting environments well into their 30s, unable to flourish as they wish, millions  more of all ages and backgrounds in insecure and undignified housing up and down the  country, not to speak of the thousands experiencing street homelessness.

Failure to fix this problem – and failure to make this argument persuasively – is therefore a  moral failure. The recognition that we must do whatever it takes to end the housing crisis  should be at the front and centre of every debate, every political conversation, and every  policy consideration: not simply to boost economic growth, or to attract younger voters, but  because it is the right thing to do.

Omid Miri

Omid Miri has been a Councillor in Hammersmith & Fulham, and Chair of the Planning Committee, since May 2022. He is passionate about tackling the housing crisis and campaigning for housing as a human right, and particularly interested in re-prioritising social and council housing as a form of tenure.

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Labour’s Plans to Increase Home Ownership & Abolish the Leasehold System

The Labour Party will gather shortly at Liverpool to discuss the National Policy Forum’s report which is likely to form the basis of the manifesto for the next General Election.

Labour is seeking the support of aspirant home owners with proposals to guarantee the deposit of those who can obtain a mortgage. The party is concerned that the number of home owners is falling especially among young people.

The Leadership wants to see the proportion of all households who are home-owners reach 70%. The current rate is 65%. The last time it was 70% was in 2003. This target is therefore ambitious given the decline in wages and is dependent on a growing economy.

Labour will retain the Right to Buy for council tenants, though the discount rate will be reviewed. Council leaders will argue that this policy will not help their efforts to reduce the record numbers of homeless households in temporary accommodation.

Labour supports leasehold reform

The report sets out helpful polices to attract the support of the 4.86 million leaseholders who live in England and Wales. Scotland abolished their leasehold system in 2004.  Many leaseholders live in marginal constituencies.

Leaseholders do not own any bricks and mortar in their homes. They own the right to live in their property for a limited period. Once their lease runs out, they will become mere tenants if they do nothing. Service charges disputes are commonplace. Freeholders can recover their legal costs from leaseholders even if they lose at court. Virtually all the former UK colonies no longer have a leasehold system.

In 2002 Labour introduced the Commonhold and Leasehold Reform Act. This was designed to replace the leasehold system with commonhold. It failed due to opposition from many vested interests. 

There are only a handful of commonhold sites in England and Wales. Commonhold is not just for flats. It also applies to interdependent buildings with shared facilities and common parts. On the Isle of Shepey in Kent, the owner of a mobile home site gave the land via a commonhold company to the site residents who now manage the site themselves.

The Law Commission’s proposals to replace the feudal leasehold system with the modern commonhold tenure will be implemented in full at minimal cost to public funds. Commonhold will become the default tenure for flats.  Such proposals are very timely as the Government has decided to drop their own plans in this area. The Conservatives will deny that this is linked to nearly 40 % of their donations coming from developers.

Fire Safety

All leaseholders will be protected from the costs of remediating fire safety defects for cladding and non-cladding defects. All dangerous buildings will be identified, registered, and made safe. In September 2021 there were over 1000 unsafe buildings in London alone. The current government still does not know how many blocks are unsafe. The rate of remediation is painfully slow and there are non-qualifying leaseholders who are ineligible for help  under the 2022 Building Safety Act. Such proposals are welcome.  

The report refers to the rate of remediation being accelerated. However, there is no mention of who will pay for such work or how it will be carried out. This area needs to be sharpened up though the financial implications are challenging. 

Flat sales are falling due to the complexities around the Building Safety Act. Some conveyancers  will not act for leaseholders who are forced to sell at a loss at auctions. 

Further work needed

There are other problematic issues for home owners that need addressing. Shared ownership needs to be reformed. How can this be considered as a form of ownership when such residents can be evicted for two months’ worth of rent arrears and lose all any equity that they have built up?  There is currently a Commons Select Committee inquiry into shared ownership. It is likely to be critical.

The estate charges that house owners pay on unadopted private estates to volume builders are controversial. Home owners can lose their homes if they ignore such charges. These are known as fleecehold. The former Labour MP for Bishop Auckland Helen Goodman produced an excellent 10-minute rule Bill in 2017 (see her YouTube video here).  Her Bill is outside the scope of the Law Commission’s work though the  Competition and Market Authority are in the process of investigating such charges.  

The situation for the owners of mobile homes is crying out for reform. They own the property but not the land it sits on. They have to pay 10% commission to the site owner if they wish to sell.

Attitude of Party members

Labour outside Westminster appears at times to have a cultural problem with owner occupied housing. Although leasehold reform has been in nearly all Labour election manifestos since the war, this issue has seldom been discussed at Labour conference. None of the progressive think tanks have produced reports on leasehold reform, though see this report by the Welsh Government. 

One of the reasons for the failure of the 2002 Act was the lack of support outside Parliament. Unfortunately, the work of the leasehold reformers such as the Leasehold Knowledge Partnership, the National Leasehold Campaign and Commonhold Now are seldom discussed in Labour circles.

Devolution

Labour will introduce a Take Back Control Act. This will devolve power away from London. It is not clear what the implications are for housing. The NPF envisage that new development corporation will lead in partnership with developers and local councils in the drive for building new homes. Will Sadiq Khan be empowered to require developers to introduce a commonhold scheme as envisaged in previous manifesto? Will “fleecehold residents “be able to require local councils to adopt communal facilities on their estates? 

The NPF report is strong on the need to build more homes. Potential home owners will be attracted to the Labour Party by the thought of a guaranteed deposit. However, doubts remain whether young people can obtain a mortgage when the average property in London costs over £600,000.  Reinvigorating commonhold will attract political support. The Labour leadership needs to provide support to Labour parliamentary candidates on how to campaign on leasehold reform.

Dermot Mckibbin is on the Executive Committee of Labour Housing Group, and will shortly become a member of the new Beckenham & Penge CLP

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Housing: Labour’s Sixth Mission?

The ‘Final Policy Documents’ from Labour’s National Policy Forum for Labour Conference include the core housing policies from which Labour will draw its Manifesto for next year’s general election. It is therefore probably the most important statement since the 2019 Manifesto and the Housing Green Paper ‘Housing for the many’ produced by John Healey in 2018.


It is right that our national housing policy should be comprehensive, dealing with all tenures and tackling issues that affect people across the range of incomes and stages of life. So, I welcome the fact that the document looks across the housing landscape. However, I also remain convinced that the big-ticket item in housing is how to provide many more homes for social rent, and the document is not impressive on that front.


The document addresses access to home ownership and proposes a mortgage deposit guarantee scheme for first-time buyers, a good proposal that is long overdue after years of inflationary and hugely expensive Tory demand subsidies. There are good proposals to reform stamp duty and to back schemes like ‘first dibs for local people’ on new developments (first pioneered by Islington).

I also fully support the emphasis given to reforming the feudal leasehold tenure – about which Dermot McKibbin has written persuasively for Red Brick. The document repeats the target of 70% home ownership, with no timescale, but not the previous commitment to restore social housing as the second biggest tenure. The latter was a statement of intended direction, and its disappearance is a big concern.

The proposed reforms to planning, flexibility around the green belt, scrapping the infrastructure levy, and the ‘unleashing’ of ‘patient capital’ into housebuilding, and higher disability standards, are all outlined, although the devil will be in the detail of each of these and the word ‘reform’ is used too often without saying what and how. Planning needs to stop being so reactive and developer-led so I hope it is true that we will ‘pioneer new models of strategic development’ – but we need meat on the bones.

I like the proposed reform to compulsory purchase orders and there is a hint of awareness of the underlying problems caused by the land market and developer profits, but overall the package of land-related reforms seems weaker than the 2015/2017/2019 Manifestoes. As there is little discussion of the public investment needed to purchase land and build infrastructure, it is not clear how the package will transform the planning process in practice to secure the claimed major uplift in housebuilding. In an era of Metro Mayors and at a time when councils are itching to build themselves, I am not convinced by the idea of new development corporations. No-one wants to wait for new administrative structures to be established.


Following the Tories’ huge cuts to social housing grant, planning gain (the mechanism of s.106 agreements) has produced half of all affordable housing. More could be achieved but maximising affordable supply – especially achieving social rent rather than sham affordable tenures – through planning rather than accepting what is offered might also require additional subsidy. One key change not addressed is to end the abuse of the specious ‘viability test’ through which developers pay too much for land and understate their likely profit to escape their responsibilities to the community by arguing that affordable homes are not viable in the resulting development.


I like the promise raised by the Warm Homes Plan – which will ‘upgrade all the homes that need it’. It’s a critical issue on the path to net zero but, as elsewhere in the document, additional spending is implied without being it being clear where the funding will come from. Homeowners and landlords are unlikely to put up the money without a lot of central government help, and it would take up the bulk of the green investment budget to upgrade all homes. There is a commitment to ‘improve the quality and safety of existing social homes’ but we need clearer guarantees in the post-Grenfell era and following the spike in damp/mould problems in the stock.


Any comprehensive strategy must address the private rented sector. Here the document has good ambitions and quite strong proposals – a Renters Charter, ending no fault evictions, a binding decent homes standard and action against poor landlords, banning discrimination against those on benefits and a national landlord register. My first worry is that there is no assessment of what will happen to the market if all these changes are made: we need to understand what the outcome might be and to plan the further interventions that might be needed. Secondly, all these changes, excellent in themselves, require local authority intervention and enforcement, and on a large scale. It will not happen without the resources – in the form of tenancy relations officers and environmental health officers especially – to implement it, and there is no mention of resources. And thirdly, nothing is said about rent levels or about the iniquitous impact of the Local Housing Allowance and total benefit cap levels: none of the proposals will meet the document’s claim that it will make private renting more affordable.

So, what about the delivery of homes directly to people in housing need, the 100,000+ households in temporary accommodation and the millions on waiting lists or stuck in the misery of the private rented sector who need a secure genuinely affordable home? Except for those who retain a quaint belief in trickle down – ie that the poor will eventually benefit from building market homes – most people understand that only social rent meets these needs. Yet this is the tenure that is addressed least in the document – and this is its greatest weakness.

It starts ok: ‘Labour will also put genuinely affordable housing, and in particular social housing, at the heart of our plan to increase housing supply.’

But what are the specifics? Let us remember that we were committed to gearing up to building 150,000 additional social rent homes a year, including 100,000 new council homes. The commonly accepted minimum requirement is for 90,000 social rent homes a year. Gearing up to any of these figures would be a challenge over a Parliament and very substantial increases in grant and local authority/housing association prudential borrowing would be required. We know that councils have been itching to build many more homes, it is only central government and funding that has held them back.


Making the case for housing investment is a constructive challenge to Labour’s economic as well as housing policy. There have been many studies over the years which consistently demonstrate the positive economic impact of housing investment, including by the SHOUT campaign, all of the housing organisations, and most economic researchers. New social rented housing should never be considered as simply a cost, it also generates an income stream for ever, reduces the cost of benefits, and creates real productive growth.


Regrettably, the document has no targets for affordable or social rented housing. Its key proposal is that Labour will ‘Reprioritise government grant by reforming the Affordable Homes Programme’. The current AHP runs from 2021-2026 and by late 2024 it will be very largely committed. Even then, extra subsidy (grant) would be needed to shift the very final stages of the programme from, for example, ‘affordable rent’ to ‘social rent’ homes – but there is no promise of the extra spending needed to go with the idea.


The ‘reprioritisation’ commitment would have more credibility if it targeted the totality of housing expenditure programmes rather than just the AHP, because some remaining housing demand subsidies could be repurposed.

And what about the years beyond 2026 – the last 3 years of a Labour Government? On current Tory spending plans, capital spending on housing falls off another cliff at that point. With no new AHP announced for 2026 onwards, the UK Housing Review reports that predicted spend on affordable homes will fall from £2233m in 2025/26 to £529m in 2026/27. If Labour sticks to Tory plans there will few affordable homes of any kind. To avoid huge further cuts and to maintain a programme – even at the current inadequate size – Labour must commit to additional spending on housing over and above current Tory plans.

Although reforms to restrict the right to buy are proposed, the policy will continue in some form. Adding in demolitions, losses will continue but at a reduced level. There is a hoped-for increase in social rent from planning but an inevitable reduction in output of new homes from the AHP after 2026. On balance it seems unlikely that the document’s proposals will lead to a net increase in the social housing stock until well into the Labour government, and possibly not at all. This is unconscionable.


Even if we provide the additional spending needed for a new AHP the homes will take some years to produce. We face a housing emergency where we are currently unable to meet the need for temporary accommodation let alone the increasingly urgent need for permanent homes. With 130,000 children living in temporary accommodation, we know the costs of bad housing and homelessness are huge in health, education, well-being, and life chances. The only effective short-term response to the housing emergency will be a major programme of acquisitions, bringing homes into the social rented stock for early use.

One final gripe. The document has only a few words on homelessness – we will have ‘a workable strategy’ which will ‘transform lives’. But it appears to be only about one aspect of homelessness – rough sleeping – and is platitudinous. It is miles away from what is needed if a new Labour government is genuinely to tackle homelessness.

The NPF document’s first words in the housing section – ‘Housing is a human right’ – should be at the core of Labour’s policy making, but there is no commitment to put the human right into law. As they stand, the policies set out will not take us much nearer to achieving that aim.

There are some good ideas and proposals, but the document is seriously deficient in failing to identify serious targets, means of delivery and, above all, resources. It is particularly weak in failing to adopt a target for additional social rented homes or even a sense of direction or some hope. There is a serious risk that, by the end of Labour’s first term, trends that have become entrenched under the Tories – rising homelessness, increasing housing need, and growing unaffordability – will not have been reversed.

Housing investment contributes positively to all Labour’s Five Missions. It secures growth; it makes a major contribution to achieving net zero; it promotes good health and well-being; it builds safe communities; and it breaks down barriers to opportunity. Housing should be Labour’s Sixth Mission.

Steve Hilditch was a founder member of LHG when it formed 42 years ago. He worked as a housing professional and consultant and advised the last Labour Government, various Select Committees and many Labour Councils on housing matters. He recently carried out a detailed housing review for the new Labour Westminster Council. He edited Red Brick blog for 10 years, publishing a compendium book of 100 posts in 2020.