We're setting off around the country for the next few weeks as the party conference season begins. As part of our campaign to make housing the number one issue at next year's election, we're holding events at each of the three conferences, starting with Labour, whose members descend on Manchester this weekend.
Emma Reynolds, the shadow housing minister, is speaking at a fringe event we are hosting with Shout (Social Housing Under Threat) which asks what her party has to offer the country's 20 million renters.
The event - which will also hear from Alison Inman of Shout, John Healey MP, Sarah Hayward of Camden Council and Owen Jones - is open to anyone with a conference pass and starts at 6.30pm on Sunday. We've written a bit more on this in a guest blog for the Young Fabians.
As a flavour of what to expect, Emma Reynolds revealed some of her plans recently in an interview with Louie Woodall for the Young Fabians' magazine, Anticipations. Here's are some edited highlights:
I quiz Reynolds first on the private rented sector. This January at the Fabian Society annual conference, Ed Miliband made waves with the announcement that Labour would introduce a national register of landlords to enable local authorities to root out rogue operators and prevent a 21st century resurgence of Rachmanism. It sounds like a common sense policy to purge the private rented sector of dodgy practices and ensure there are good landlords operating in the areas of most need. But how will it work in practice?
“Some local authorities are actually already doing this [registering landlords],” says Reynolds, “but they’re having to jump through a lot of hoops to introduce licensing because at the moment if you want to license a landlord in a specific geographical area you have to provide evidence that there’s either anti-social behaviour or low housing demand in that area, or if you do what is called additional licensing like they’ve done in Oxford, you have to define [what the licence covers], so in Oxford its only for houses for multiple occupancy,” she adds.
She explains that the schemes in place at a local level require prospective landlords to buy a licence from a local authority, which first inspects the properties they wish to put on the market to check they are safe, secure, and that they meet strict criteria on living space. For example, a bedroom can only be designated a bedroom if it is larger than a certain size, and in houses for multiple occupancy there has to be sufficient bathroom facilities for all residents. “Local authorities want to introduce more licensing, but don’t feel that they’re in a position to do so. We want to give local authorities greater power to do that,” adds Reynolds.
She adds that the policy’s end goal would be to create a professionalised private rented sector where institutions and experienced independent landlords can offer a range of suitable properties to tenants and are willing and able to look after the property throughout individual tenancies.
“If that’s a barrier to entry, then so be it, that’s a good barrier to entry in my view,” she says.
Moving on from the private rented sector, I ask Reynolds what she’s been working on in regards to arguably the most pressing housing issue right now: lack of supply. We are currently living through the lowest period of house building since the 1920s. The charity Crisis estimates that we need to construct approximately 250,000 houses a year just to keep up with demand. We’re currently averaging 100,000.
Labour is committing to building 200,000 houses a year by the end of its first term back in power, a target that is “ambitious but realistic,” according to Reynolds. But how can a Labour government achieve this level of house building?
The key is to incentivise developers to build on the land they own, rather than hoarding it in anticipation that prices will rise- a practice known as landbanking. The so-called “use-it-or-lose-it” policy unveiled by Miliband seeks to spur developers to construct properties by threatening them with fines and compulsory purchase orders (CPOs) if they don’t. On paper, it sounds like a crude bit of policy, all stick and no carrot, not to mention that it assumes what underlies the supply problem is the greed of developers, rather than a lack of suitable land to build on.
Reynolds explains that the Lyons Commission, the independent inquiry set up by Labour to look into solving the housing crisis, will take a more nuanced approach to landbanking than the popular press assume.
“Lyons is going to be looking at companies that landbank [using sites] with planning permission, but also strategic landbanking, which is when [developers] buy up land that they don’t have planning permission for and sit on until the value rises,” she says.
This is an important differentiation. All developers maintain a landbank as a form of investment to smooth returns in unprofitable years and ensure plots are available to them for future development. This on its own is sound business practice. What Reynolds is saying is that there is a different type of landbanking cropping up- this strategic landbanking- which goes beyond this principle and artificially inflates the price of property to the advantage of no-one but the developer. In these instances, developers aren’t looking for opportunities to build on acquired land. They’re simply speculating that these plots will rise in value to skim off a profit. Labour rightly wants to clamp down on this predatory capitalism.
In addition, Labour is considering updating the government’s local plan system to ensure councils take a more joined-up approach to assessing housing need in a fixed area.
“[Currently] local authorities don’t have a common methodology for assessing housing need. One council can say ‘we really only need this many houses,’ whereas if they’d coordinated with another local authority, they’d find the real need was greater. Some authorities underestimate the number of houses they need, and some do not, so to get around that you should have a common methodology for identifying housing need,” says Reynolds.
The Young Fabians are hosting their own event at Labour conference - at All Star Lanes on Monday evening at 6.30.