Cllr Liam Downer-Sanderson is a councillor in Hammersmith and Fulham. Jessica Stewart is Managing Director of Comm Comm, a communications consultancy specialising in the built environment and stakeholder engagement.
If Andy Burnham is serious about solving Britain’s housing crisis, Conservatives should offer him a deal. What!? I hear you say. Just hear us out…OK. Build the biggest council housebuilding programme in a generation. In return, remove affordable housing obligations from private developments.
There is nothing un-Conservative about that. If government wants to pursue a public policy objective, it should fund it openly rather than expecting private development (and hence private buyers who pay the ultimate elevated purchase prices to subsidise social homes) to carry the cost.
Conservatives rightly focus on home ownership and increasing housing supply. Yet one point is too often missed: the private housing market cannot function properly without a healthy social housing sector.
Britain’s housing market is one ecosystem. When there are too few council homes, families who would otherwise move into them remain in the private rented sector, increasing demand and pushing up rents. Councils spend more on temporary accommodation while taxpayers subsidise rising private rents through Housing Benefit and Universal Credit. Home ownership moves further out of reach.
The numbers illustrate the scale of the problem. Around 1.3 million households are waiting for social housing in England. Councils spent almost £2.9 billion on temporary accommodation last year alone – 29 per cent more than the previous year and more than double what they spent five years ago. If politicians are right to describe housing as a national crisis, continuing to spend ever larger sums managing its consequences is becoming an increasingly poor substitute for addressing its causes.
Once you accept that some level of social or subsidised housing is necessary, and every major political party does, the debate shifts. The question is no longer whether Britain should build council homes but how many it needs and who should pay for them.
Our current approach has evolved by accident rather than design. Around £7 billion is raised each year through Section 106 agreements, with affordable housing accounting for the largest share of developer contributions. Nearly half of all affordable homes are now delivered through developer obligations instead of direct public investment. It was easier to sustain when house prices, sales values and development margins were stronger. Today, in a much weaker market, the model is under growing strain.
Developers should continue contributing towards the infrastructure that new development requires. Affordable housing is different. As planning communications consultants, we have seen viability become the defining issue in scheme after scheme. Across London and the South East, projects are being redesigned, delayed or abandoned because they no longer stack up financially. That is no longer the exception; it has become the norm. Every additional obligation imposed through the planning system makes marginal schemes less likely to proceed. It doesn’t matter if 20 per cent or 50 per cent affordable housing is agreed by planning committees if nothing ever gets built – any per cent of nothing is nothing. At a time when Britain desperately needs more homes, asking private development to fund social policy is becoming increasingly self-defeating.
The Government’s new £39 billion Social and Affordable Homes Programme is a welcome acknowledgement that more public investment is needed. But if ministers genuinely believe Britain faces a housing crisis, the response should reflect the scale of the challenge. Crises require emergency funding.
That means restoring meaningful capital grant funding so councils and housing associations can build at scale again, instead of relying on affordable housing delivered as a by-product of private development. In return, affordable housing requirements should come out of Section 106 agreements. Developers would still fund the infrastructure needed to support growth, but responsibility for financing social housing would return to government, where it belongs.
This is a bargain Conservatives should be prepared to make. Labour would secure a major expansion of council housebuilding. The planning system would become simpler and more predictable. More private schemes would become viable and more homes would get built. Councils would acquire long-term housing assets instead of spending ever-growing sums on temporary accommodation. Most importantly, Britain would increase housing supply across every tenure.
The obvious question is whether we can afford it. A better one is whether we can afford the alternative. Britain already spends billions dealing with the consequences of housing shortages while extracting billions more from private development in ways that suppress housing supply. Redirecting more of that money towards building council homes would not merely reduce the symptoms of the crisis; over time, it would reduce the bill for housing failure itself. And, more importantly, it would stimulate the construction industry which is widely acknowledged as a key driver for economic growth.
Conservatives believe in transparent taxation, accountable public spending and clearly defined responsibilities between the state and the market. Housing should be no different. We also believe in home ownership being the lifeblood of a successful society and a right-leaning voter base. If Parliament believes Britain needs more council housing, ministers should make that case openly and fund it through the Budget rather than relying on hidden taxes within the planning system.
Done properly, that would achieve more than an increase in council housebuilding. It would strengthen the private housing market, improve the viability of new development, unlock stalled sites and bring home ownership within reach of more families.
If Andy Burnham is serious about tackling Britain’s housing crisis, this is the bargain he should make.