Stephen Greenhalgh is the Deputy Mayor for Policing and Crime and is seeking the nomination to stand as the Conservative candidate for Mayor of London in May next year.
Anyone campaigning in London knows that housing is the critical issue. The reason is not hard to discover: In our capital city more people rent privately than own their home either outright or with a mortgage. The recently published Halifax Generation Rent 2015 report shows that London has the lowest proportion of homeowners aged 20-45 (39 per cent) and the highest number of people in this age range who worry that they will never own a home (82 per cent). We are currently set on a course where more Londoners will rent privately than own their own homes within the next five to ten years.
We are the victims of our own economic success. A growing population has outpaced the supply of new housing in our capital city. With around 750,000 Londoners in social rented housing, the percentage of home owners has already collapsed from two-thirds of London households to less than half.
A generation of young professionals and key workers is stuck renting and is unable to buy their home. This is a huge challenge, but also an opportunity for Conservatives to speak for London’s aspiring home owners. As the Prime Minister explained last week, “That’s the most natural instinct in the world. Owning your own home.”
Whenever Labour talks about making housing affordable, it calls for more council housing and more social tenancies. All four of their mayoral hopefuls press repeatedly for more social housing and Diane Abbott has even called for private sector rent caps. Yet Labour’s focus on rented housing is the complete opposite to the aspiration of the vast majority of Londoners to buy their own home, as a startling new YouGov poll shows.
By a margin of two to one, Londoners want homes that they can afford to buy, not more social housing. In fact, across every demographic group, and even among Labour supporters, home ownership is their key priority. Access to a new model of private, secure renting is also favoured by every cross-section of Londoners over more social housing. Labour’s instincts, whether self-serving or honourable, are simply not in tune with what voters want.
The last time our party took the fight to Labour on housing, we introduced the Right to Buy, earning the lasting gratitude of a wave of people who were able to buy their council homes. The rumoured extension of the Right to Buy to housing association properties is welcome. It is right to extend the ladder into home ownership for more social tenants. However, house prices in London will make full ownership impossible for the vast majority – even with a significant discount. Right to Buy can only gain traction in London through the right to buy part shares in their homes (“Right to Buy Part”) matched on a “buy one get one free basis” to provide a substantial discount so extending that home ownership ladder further down the income scale and across generations.
Now it is also time to provide an equivalent to the Right to Buy for the capital’s private renters: an genuine “Opportunity to Buy” as part of a home ownership revolution. Londoners in their twenties and thirties deserve a realistic prospect of owning their own home, with the security that ownership brings. Likewise, key workers in our public services, such as paramedics, police officers, nurses and teachers should be able to get on the housing ladder within a reasonable distance of their place of work. The future growth of London’s economy actually depends on it.
The Chancellor is talking in similar language and wants to double the number of first-time buyers nationally over the next Parliament. We need to be even more ambitious in London. From a Conservative perspective, the collapse in home ownership has been mirrored by the erosion of our vote over the last decade. Between 2006 and 2010, we lost ground in London, against the national trend. Boris achieved his two outstanding results by massively outpolling the party as a whole, which was only just enough the second time around.
Both the Mayor and the Government have strong records. More homes are finally being built in London and more of the ‘affordable housing’ (i.e. the part that is subsidised, in effect or practice) is ‘intermediate housing’ based on ownership. Boris is on track to deliver 100,000 new affordable homes over his two terms, far more than Ken Livingstone managed, and he has achieved this despite the twin obstacles of the economic crisis and resistance from many Labour boroughs.
From the confines of coalition, the Government has shown serious intent by cutting the bureaucracy around planning and introducing “Help to Buy”, new housing zones and starter homes. These are real achievements, ending the inertia under Labour. Even with hundreds of schemes underway, however, this will not be enough to reverse the decline in home ownership in London. Population growth is still adding residents faster than we are adding homes.
It will take home building on a new scale, with new urgency. Having been the leader of a London Borough for six years, I am under no illusions about the challenge this presents. I got four times as many ‘intermediate’ homes built than my Labour predecessors, created a Home Buy Unit for first-time buyers and key workers and granted planning permission for tens of thousands of new homes. Contrary to myth, I also oversaw a net increase in social housing.
London desperately needs a ‘home ownership’ blueprint and I have announced that as Mayor of London from 2016:
- Only those who have lived and worked in the capital for at least three years would be able to buy new homes built on public land. A similar condition would apply to housing associations and developers receiving Greater London Authority funding. This would reserve new homes for Londoners.
- 50,000 new affordable homes would be built for the city’s key workers – such as teachers, paramedics, police officers, firefighters and nurses, “the brilliant people who keep our city alive”.
- I would tackle empty homes in London by pushing for a new Empty Homes Corporate Tax to be levied on companies – which account for the vast majority of foreign property investment – whose properties are not occupied for at least half the year. The burden of proving residence would be on the business.
- I would also push for action to be taken against “land banking” where owners buy brownfield sites, do not develop them and watch their value increase before selling the land. I would seek to introduce a new levy on any financial gain made by landowners who fail to redevelop sites.
The priority for Conservatives must be to deliver a home ownership revolution in London. At the moment we risk having an entire generation priced out of the London housing market, stuck on rent and unable to buy – something Labour’s obsession with providing only social rented housing will perpetuate. We must put Londoners at the front of the queue to buy new homes they can afford. It is a scandal that Labour focuses solely on social housing and misses the bigger picture. It is one more reason to get out there and campaign hard for all our Conservative candidates across the capital.