UK
‘Freedom to Buy’ “helps only a small minority and ignores the core problem”
Polly Neate, Shelter
By the Labour Campaign for Council Housing (LCCH)
Angela Rayner has announced Labour’s “Freedom to Buy” policy. This is a mortgage guarantee to encourage mortgage providers to offer low deposits; a revamped version of the Tories’ Mortgage Guarantee Scheme.
We haven’t seen any detail (including costs) but the guarantee is to the mortgage provider should the buyer be unable to continue paying. However, it is only on offer to 80,000 over five years. According to the ONS there are 6.7 million people aged 15-34 living with their parents in 2022. As Polly Neate of Shelter has said another home ownership scheme “that helps only a small minority and ignores the core of the problem isn’t going to cut it”.
“Many people in this country are closer to homelessness than homeownership. If political parties are serious about giving people ‘security’ in their homes, there’s only one way to do it. With 1.3 million households stuck on social housing waiting lists and the country haemorrhaging social homes through sales and demolitions – we need to build 90,000 social homes a year with rents tied to local incomes. And politicians must get on with renting reform – no-fault evictions must be abolished, and renting made safer, secure and more affordable.”
This is right. A large scale building/acquisitions programme of social rent housing will provide secure and more affordable homes for people imprisoned in the private sector: in the case of council housing the ‘secure tenancy’. Taking hundreds of thousands of people out of the market it would be likely to drag down prices for those who want to buy.
Unfortunately, Shadow Housing Minister Matthew Pennycook, has said that a Labour government will not increase the parsimonious amount of grant currently available under the Tories. Interviewed recently he talked of “sweating grants”. In other words getting more building out of the existing grants. But what is needed is more grant. Matthew is saying there is no more money because of Rachel Reeves self-imposed economic straight-jacket. “We have no more money” is only true if you leave the regressive taxation system in place. But there are plenty of ways to raise the funding needed.
For instance at the 2021 Labour conference, none other than Rachel Reeves said that Labour would equalise capital gains tax with income tax. In her speech she said:
“How can it be right that the police constable on £27k a year should be taxed at 32p in the pound but someone making many times more from buying & selling stocks & shares should pay just 20p in the pound? That will not stand under Labour.”
Alas, it now will stand under Labour because equalising cgt has been abandoned.
In his comments in relation to ‘freedom to buy’ Keir Starmer said that “a generation face becoming renters for life”. The implication is that renting is a lesser thing than home ownership. Council tenants are often happy becoming “renters for life” because it offers them security of tenure and rent far lower than the private sector. There is nothing wrong with being a “renter for life” so long as it’s not in the expensive and often poor quality private sector. In any case home ownership does not offer security. It can become a burden which becomes unmanageable.
With 1.3 million households on housing waiting lists and 112,000 households in temporary accommodation, including 145,000 children, what is required is a focus on social rent homes.
To shift the Labour leadership it will be necessary to build the widest possible campaign to pressure the government to provide the funding needed to build the 90,000 plus social rent homes that are necessary to begin to resolve the housing crisis. Without that millions of people will remain imprisoned in the expensive and insecure private rented sector.
- You can follow the Labour Campaign for Council Housing (LCCH) on Facebook and Twitter/X.
- This article was originally published by the LCCH on June 10th, 2024.
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