Labour’s Emma Reynolds Predictions: A Dire Housing Future – and Her Proposed Solutions

The shadow housing minister’s job is to disagree with the Government. But her policy proposals to boost homebuilding investments certainly offer detailed perspectives.

As shadow minister of housing, it is MP Emma Reynolds’ job to challenge the ruling Government. In so doing, she arguably lays out a future set of policies and programmes that might be how the UK housing crisis is addressed should Labour take back the reins – not as, she contends, how the Coalition Government is doing things.

Reynolds has laid down her positions in light of some very troubling observations and statistics. At mid-2014 she projected to the year 2020 saying that the nation’s deficit in homes would climb to 1.3 million, or as she put it “equivalent to the city of Birmingham.” And for homebuyers, the average price would be 13 times the average wage at £359,000 – requiring an average deposit of £72,000, a number she sourced from the House of Commons library.

She also lobs criticism at the Government’s Help to Buy scheme for boosting demand without directly increasing supply, an equation she says that can explain the rapid price inflation that seems to be occurring since the programme began implementation in 2013. While others may say this is simply a lag time between when developers (often funded by time-driven investors such as capital growth partners) see action and when they are able to deliver more completed homes, the country’s one-year average price increase of 10% at mid-2014 has to be acknowledged.

Reynolds laid out Labour’s ideas in detail on 1 August 2014, but she made no mention of the empty homes in England (many of which are held by foreign investors, treating property as an investment more than as an abode). She does make clear what the party would do if restored to power:

• Undertake the biggest council home building programme in 40 years – With 1.6 million families in queue, she says the number is growing because the fewest number of council homes are being built today than at any time since record keeping began.

• Support first-time buyers by boosting supply – Reynolds says that getting young families on the housing ladder is what distinguishes Labour from Tories.

• Underwrite loans to small builders to “unlock their potential” – Noting that when 200,000 homes were built each year, in the late 1980s, smaller builders were responsible for two-thirds of that total. Today, they are responsible for less than one-third of the much smaller number of home completions last year (about 109,000).

• End land banking – Empower local authorities to enforce “use it or lose it” rules on holders of land with planning permission but on which nothing has been built.

• Build New Towns and Garden Cities – In the spirit of William Morris, providing housing for communities en masse similar to those towns successfully developed in the post-War period in places that include Sheffield, New Ears wick, Letchworth and Hampstead Garden.

Making additional partisan distinctions, she notes that in local councils headed by different parties, the commitments to build vary. Councils controlled by Labour are committed to building 862 homes per annum, while that number drops to 508 with Conservative councils and 393 where Liberal Democrats hold sway. By and large, investors through real asset funds look to build where those commitments are greater, and in those locations the local economy benefits from more housing, new employers, and increased infrastructure and commercial development.

The high demand for housing in public and private markets is unquestionably a draw to investors. And under each party leader, commitments are put forth emphatically to set policies that encourage more building. Any individual considering this sector for achieving asset growth is encouraged to speak with an independent financial advisor to sort through the relative risks and rewards of such investing.

Leave a Reply

Your email address will not be published. Required fields are marked *