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Robert Halfon is MP for Harlow, a former Conservative Party Deputy Chairman, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.

ConservativeHome readers will have noticed a certain theme in what I have written over the last year or so on this site. That theme, of course, is the ladder of opportunity. Today, I want to write about a different kind of ladder – the property ladder.

There’s a housing crisis in the UK. Homelessness is rising, and house prices and rents are moving beyond affordability. Grown-up children are spending more time living at home, and people are renting for longer, as they find it increasingly difficult to get on the property ladder. I’m contacted frequently by my constituents in Harlow in this vein, and I know that hard-working people are experiencing the same issues across the country.

Despite the news coverage of the issue, this isn’t just a problem for young people. Increasing difficulty in getting on the housing ladder means that fewer and fewer middle-aged tenants will be able to afford a mortgage. This was recently reported by the Office for National Statistics, which found that the proportion of those who rent, aged between 45-54, rose from eight per cent to 14 per cent during the ten years to 2017.

The reasons for this are clear, and have been long in the making. We’re living longer, and in smaller households.  For decades, we haven’t been building enough new homes (regardless of which party was in government). The last time we built anything near a sufficient number of new houses was during the 1970s. Since then it has steadily declined to half that (150,000 last year, from around 300,000 in 1969/70).

Crucially, we need to make sure that there are enough homes for the next generation. It’s vital that our children (and our children’s children) have access to high-quality housing. It will provide them with the stability from which they can work or study without the worry of excessive rent to pay, or their family living in cramped, unsuitable conditions.

The Government is pouring billions into housing, with a variety of schemes to do just this, and it must be applauded for its successes. It’s also been tinkering with the planning system in an attempt to encourage more houses to be built more quickly.  Having said that, schemes set up for the public sector to replace properties ‘lost’ through Right to Buy have failed dismally, since the Treasury claws back too much of the proceeds. Forward-funding infrastructure schemes won’t produce the number of homes we so desperately need either.

The missing link between the 1970s and now is the disappearance of council housing.  In 1969/70, councils provided almost half of all new housing. This all but disappeared by the start of the 1990s.  Under Tony Blair, councils built an insignificant 60 homes in 2001/2 (down from 135,700 in 1969/70).

During that period, the spotlight moved to housing associations. Social housing was expected to fill the gap, but never came close to matching council housing construction levels, peaking at 31,380 in 1994/95.  Many housing associations are only former council housing departments with risk-averse management, not prepared to get stuck in to new projects.

Of course, the Government is concerned about public sector debt and caps are in place to control borrowing for council housing – but constant tinkering with housing finance has made the system very complex.  The whole subsidy system was abandoned five years ago, and replaced with a self-financing system based on a 30 year business plan. That worked for two years, until the Treasury decided to mix things up again by reducing social housing rents by one per cent a year for four years.  This put a spanner in housing association plans to build more.

The Treasury’s argument went as follows: housing benefit is one of the most significant welfare costs. By reducing rent, the total cost of Housing Benefit and Local Housing Allowance (for private sector rents) will fall too. But this logic is called to question when the number of people claiming Local Housing Allowance is growing constantly and their private sector rents rising.

Attempts have been made to control private sector rents, but the caps don’t work and leave private sector tenants to make up their rent from other benefits. The result is families, single parents and young people struggling to pay their rent without really reducing the Housing Benefit cost.

What’s more, these families are finding that the private sector is their only option. With the decline in council housing construction, the impact of Right to Buy and the increasing cost of housing, more of the population has moved into the private sector, where rents are market-led.  In Harlow, average council house rents have reduced to just over £91 per week, whilst private sector rents have risen to more than twice that.

Substantial savings could be made to the cost of Housing Benefit. All that is required is a greater supply of council housing for those currently stuck in the private rented sector to move into. I know it won’t be easy, but we could help the process along.

Borrowing caps could be lifted for new council housing projects (they rocket-boost investment and regeneration, so this would make sense). Loans to build council housing could be made on a mortgage basis with a clear repayment plan, thereby controlling public sector debt. This would reduce the cost of housing benefit, bringing much needed relief to the current account deficit. In the long term, an increased supply of housing would moderate house prices, making them more affordable and reducing the demand for rented accommodation.

We need more houses, not just to buy, but to rent – truly affordably, as well. This is a social justice issue. We need to ensure that those who cannot work full time through age, illness or accident have somewhere to live that is safe and comfortable – and that doesn’t send them into a spiral of debt.

Maybe the impetus we need to make this happen is to ask ourselves, straightforwardly, where our children and grandchildren will live in 20, 50 or a hundred years time – and whether we want them to have a somewhere safe and comfortable to live; a stable base from which they can reach the top of the ladder of opportunity.

With thanks to the support and expertise of Cllr Simon Carter, Shadow Housing Portfolio Holder, Harlow District Council.

38 comments for: Robert Halfon: It’s time for Ministers to let local authorities build more council homes, and borrow to do so

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