Labour appears to be planning to make housing a big priority for its first weeks in power, which is perhaps unsurprisingly, given that it will have gained power thanks in part to the growing number of frustrated young would-be homeowners. We are being led to expect a housebuilding bill within three weeks of Keir Starmer taking power, to effect the party’s promise to build 1.5 million new homes over the course of a five-year parliament.
There is a very large Nimby tendency in the environmental movement
Labour’s manifesto suggests what will be in it: local authorities will once again be set housebuilding targets, abolished under Rishi Sunak. There will be an extra 300 planning officers, funded, so it says, with higher stamp duty bills for overseas buyers of UK property. The sites of a new generation of new towns will be chosen by the end of the year. To help assemble sites for their development, compulsory purchase rules will be changed to abolish what is known as ‘hope value’ – which currently means that landowners must be compensated on the basis of what could be built on their land, were they able to obtain planning permission, not on its present land use. There will be a review of green belt areas, with some of the land designated ‘grey belt’ – i.e. not very attractive areas where development is currently banned but may not be so in future. Local people will be granted the first chance to buy new homes, ‘to end the farce of entire developments being sold off to international investors before houses are even built’. Labour is also promising a permanent mortgage guarantee scheme to replace the temporary one currently in place.
Will any of this work? These are not all bad ideas. The greater use of compulsory purchase powers, and their reform to ensure that land can be acquired more cheaply, is going to be pretty essential if we want more affordable housing. At the moment the planning system boosts property values by creating artificial shortages – and then rewards landowners with most of the artificially-created value. If we went back to the way land was acquired for postwar new towns, the government wouild capture more of the uplift in value created when planning permission was granted so it could be invested in infrastructure. Some Conservatives have wanted such reforms for years but they have tended to be blocked by the party’s powerful landowning lobby. Property rights are obviously important for any functioning society, but that doesn’t mean those rights have to be treated with such reverence that they create a housing crisis.
There are certainly parts of the green belt which do not deserve to be preserved for their landscape value – although Starmer’s assertion the other week that there are vast areas of disused car parks in the green belt seems somewhat wide of the mark. Moreover, in the M4 corridor west of London, where such sites might be found, developers have been told they cannot build homes until 2030 because data centres have taken up all the grid capacity. Labour’s efforts to decarbonise the grid by 2030, which will require massive investment in new transmission lines, are not going to help matters.
There has certainly been a problem with developers selling to overseas buyers, although a bit less now that tax changes have rendered property investment less attractive. As London mayor, Boris Johnson did introduce a similar rule to that which Labour is now proposing: that new developments must first be advertised to local buyers. But if the homes on sale are way beyond the means of local buyers, what good is that?
Labour has made noises about taking on the Nimbys, but when it is in power it will quickly realise that not all Nimbys are appalling Tory voters who don’t want their views ruined from the Home Counties bungalows. There is a very large Nimby tendency in the environmental movement. This came to light during the present government’s battles to relax the ‘nutrient neutrality’ rules inherited from the EU, which prohibit developers from building homes in several dozen local authority areas unless they can first prove that their homes will not add a molecule of nitrate pollution. This is extremely difficult to do given that all new homes tend to have flushable toilets, which is why the present government proposed a more flexible system: new developments could be allowed, alongside other local measures to reduce nitrate pollution.
But what did Labour do? It opposed the new measures when they were introduced in the Levelling Up and Regeneration Bill last September. The reforms were then blocked in the House of Lords, with Labour leading the charge against them. Labour now says ‘we will implement solutions to unlock the building of new homes affected by nutrient neutrality without weakening environmental protections’. But it doesn’t say how, which makes you wonder whether it yet has any ideas on how to achieve this. All recent governments have floundered on ambitious housebuilding plans. A Keir Starmer government is likely to be little different.