Can Labour Address the Housing Crisis?

4th October 2013 posted in Property News

Can Labour Address the Housing Crisis?

Labour leader Ed Miliband has said this week that building activity for new housing is at its lowest level for almost 100 years and has vowed to build 200,000 homes a year by 2020.

According to a BBC report, Miliband is set to announce plans intended to ease the shortage by freeing-up councils when it comes to planning regulations, “penalise developers that hoard land and deliver another wave of new towns”.

It’s thought that Sir Michael Lyons will head up a review of the housing situation for the Labour party and that the housing crisis is key to the rising cost of living experienced by many across the UK.

This is supported by the National Housing Federation (NHF), who believe that nearly 4m people will be forced to live with parents until a later age as they can’t afford to move out on their own.

Young people will be forced to live with parents

By 2020, the NHF state, both property prices and rents will become increasingly unaffordable, forcing more young people to stay put. The Federation say that this is down to the worsening housing crisis which can only be alleviated by building more new homes.
It described the current Help to Buy scheme as a “sticking plaster” which whilst it may be effective in the short-term, it won’t in the long run. It’s more likely that the scheme will create another housing bubble unless more is done to build more homes.

The Help to Buy scheme is still in the first phase with the second to be launched in January. It has proved to be very popular and has boosted the sale of new homes considerably, but not enough, say the NHF.

Jilted generation

Currently, the NHF describe those born in the 80s as the “jilted generation” who can’t afford to buy their own homes and warn that it’s likely that those born between 2001 and 2011 will also have this problem unless something changes.

This will significantly add to the current problems we’re experiencing in the UK when it comes to affordable housing. It’s thought that the amount of people living with parents will rise by 700,000 in the next 7 years.

However, housing minister Mark Prisk disagreed with the NHF report, saying that it didn’t “take proper account of the range of measures we’ve put in place to create a bigger and better private rented sector”.

More rights for local authorities?

According to Miliband, giving local authorities the “right to grow” beyond boundaries, meaning that they will have the power to override neighbouring towns will help growth. It’s also been suggested that councils should have the power to purchase land from developers, telling them to “use it or lose it”.

Suggestions from the Labour leader also include the encouragement of new towns, such as Stevenage and Milton Keynes. He’s due to announce the plans at the annual Labour Party Conference to be held in Brighton.