The article below is taken from this month’s Housebuilder magazine.
Newgate managing partner Rebecca Eatwell looks at what the industry could expect if Labour wins the next general election.
The recent reshuffle – which saw Alok Sharma vacate the role of Housing Minister after just six months in the job and was accompanied by a revival of the old Ministry of Housing (last seen in the 1970s) – was greeted with predictable derision by the Labour Party. It would take more than a change of name and a change of minister to tackle the housing crisis, John Healey MP told us.
And of course that is the role of Her Majesty’s Opposition – to oppose and critique – and it is an easy space to occupy. But following last year’s general election campaign (who would have thought that losing could feel so much like winning?) and opinion polls that continue to give Labour the edge (just), there is the very real possibility of a Labour government next time we go to the polls.
What would that look like for the housing sector? Labour pledged in its 2017 manifesto to build over a million new homes. Sounds great but the issue with housebuilding is not about setting targets (which Governments invariably miss) but about tackling the barriers to delivery. The party is also pledged to create a new Department for Housing (sorry, Ministries are in vogue) to tackle the housing crisis. What this would look like and how it would deliver against the ambitious targets remains to be seen.
What we can expect is investment and new powers to increase council house building programmes. Corbyn has pledged to remove restrictions and begin the biggest council building programme for at least 30 years. There will undoubtedly be stricter targets for affordable homes. London Mayor Sadiq Khan’s ambition for 35% affordable across the board could provide the certainty that developers are looking for. And he’s not the only one: Greater Manchester Mayor Andy Burnham swept to victory last year on a pledge to build more affordable homes and has already reportedly come to blows with Manchester City Council over its strategy to build upmarket homes in the centre and cheaper homes elsewhere.
Many towns and cities have been transformed by private led regeneration schemes. But this could all change under Labour with Corbyn pledging to stop regeneration leading to the ‘gentrification’ of an area. He plans to compel councils to ballot all tenants and leaseholders before any regeneration can take place and give all tenants on a redeveloped site the right to move back to the same estate, on the same terms and conditions. There will be many concerned that this will kill some regeneration schemes off before they’ve even started.
Corbyn has also pushed back against foreign investors – an issue which has been high up the agenda in Manchester. Earlier this year developers Capital & Centric garnered national attention and queues round the block when they gave local people ‘first dibs’ on their Crusader scheme near Piccadilly.
Perhaps the most controversial announcement was Shadow Chancellor John McDonnell’s party conference speech where he outlined Labour’s intention to nationalise various industries, including construction, which according to the CBI would see investors ‘running for the hills’. Elsewhere at conference, there were some pretty strong commitments made including rent controls in cities, a tax on landbanking by big developers, and forcing slumlords to bring their homes up to scratch.
There is a lot here that, in the past, might have caused concern for the housing sector, however maybe a radical approach is what the industry needs? John Healey has said that the 2017 Manifesto still holds true but, as with any party in opposition, the reality of Government may see some of it watered down. What’s important now is for the industry to provide the perspective of the business community as Labour works up its agenda for Government so that, if Corbyn manages to pull off one of the biggest turnarounds in history, we can all move forward in tackling the housing crisis.