A new, radical and common-sense policy from the Labour Party is nice to see – especially when it is on the fraught issue of housing.
This should be an open goal for Keir Starmer, as the current government doesn’t have a credible housing policy at all. Rather, in the manner of a particularly negligent 1960s council planner, it has erected a series of ugly and expensive disasters. It has tried to give first-time buyers money to get on the housing ladder, it has tried to encourage building and it has then given into the Nimbys.
The first policy just led to an increase in house prices and massive extra profits for housebuilders, as anyone with any knowledge of supply and demand predicted would happen. It also cost taxpayers billions, while actually making it more difficult for young people to get on the housing ladder. Another Tory success.
The farce around its attempts to encourage house building is not worth recounting, except to say that Tory MPs and Tory councillors do not get re-elected by allowing anyone to build homes in their constituencies. Hence we are treated to all those scare stories about an overcrowded Britain and the threat of building on the green belt. They are designed to pander to the not-in-my-back-yard brigade who got on the housing ladder decades ago, when property was far cheaper than it is now. The same fools who tell us that the young could afford to buy a home if only they didn’t waste their money on avocados and skinny lattes.
The Tory Party and its supporters in the media are just trying to frighten voters into backing the messy status quo at a time when house price inflation means that home ownership is falling – as it has been for decades. This is a huge social, economic, and political issue and yet the Tories just put their fingers in their ears and lie about it.
Labour’s new solution is to let councils buy farmland to build on but without having to pay the farmer more than that land’s agricultural worth. This really matters, because as the Financial Times reports the difference between the two is staggering.
Plots worth £22,520 per hectare as agricultural land can on average be worth £6.2mn per hectare with planning permission – that is 275 times more. This is a wonderful earner for farmers and landowners and a millstone round the neck of local authorities. It does no favours whatsoever for those trying to get on the housing ladder.
This is also a very important policy change for Labour because it highlights the real problems of the house building sector.
The rate of private house building has stayed fairly steady for a long time but is incapable of meeting demand, housing association building has grown but nowhere near enough to fill the gap and house building by councils collapsed when the right to buy was introduced. Allowing councils to use their own land and buy more land cheaply would give them a massive incentive to return to the market and build the social housing that is desperately needed, all across Britain.
Labour could go further. There may not be any votes in it, but they could limit the right to buy and/or reduce the huge discounts available. They could make councils immediately replace any properties sold with new ones.
But this is a good, first step. I imagine the Tories will steal it at the first opportunity.