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Labour would link housing affordability to income

Words: Laura Edgar
Jeremy Corbyn / Shutterstock_411709003

A Labour government would redefine affordable housing, suspend the Right to Buy scheme and ‘transform’ the planning system so it has a ‘duty’ to deliver affordable housing.

Launching the party’s Housing for the Many review, leader Jeremy Corbyn promised to deliver a million “genuinely affordable” homes over 10 years, most of which will be for social rent. More than 100,000 of these homes would be delivered each year by the end of the first five-year term of a Labour government.

To ensure that the housebuilding target is met, the review says that ahead of the next election Labour will undertake work to see how it can reach this level of building even sooner and enable councils to deliver as many of these homes as possible.

The social housing review was launched at the Labour Party Conference in September 2017.

Corbyn said the party would “dismiss the Tories’ farcical definition of affordable housing for the sham that it is, replacing it with a definition that understands that whether housing is affordable or not depends on how much people earn, not on how much speculators have flooded property markets”.

Social rent homes would be valued at well below marker rent levels and set up using an established formula based on local incomes, property values and the size of the property. Social rent homes would be at the heart of Labour’s affordable housing programme.

Living rent homes would be set at no more than a third of average local household incomes, explains the green paper. They would be aimed at low-to-middle income working families, key workers and younger people who want an alternative to private renting.

FirstBuy homes would be discounted so that mortgage payments were no more than a third of average local household incomes. The discount would be locked into the home so that future generations of first-time buyers benefit too. These homes would be aimed at working families on ordinary incomes, key workers and younger people.

Corbyn said the government has not only “failed” to deliver on social housing, “but made it their mission to eliminate it”.

The green paper, he continued, sets out the “radical” measures needed to address the affordability problem, including ending the “viability loophole”, to create a “new era of social housing”.

It states that the government’s approach to the assessment of housing need has “a blind spot” when it comes housing affordability. It “assumes that unaffordable housing can be dealt with primarily by increasing the overall number of newly built homes.”

Since 2010, says Labour, changes to made to developer obligations have resulted in a sharp fall in Section 106 funded affordable homes, down to just 16,000 across the country.

To address the problems, Labour has identified, Housing for the Many states:

  • A Labour government will suspend the Right to Buy scheme, ending the government’s programme of “forced” conversions to affordable rent and scrap plans to force councils to sell the best of their homes.
  • The Land Registry will be kept in public hands. Reforms will be fast-tracked so that local communities know who owns, controls and has an interest in land.
  • A new duty to deliver affordable homes, linked to a better measure of local need for affordable housing would be introduced under Labour. The party would consult on new accountability mechanisms to support councils to achieve this, including an increase in the New Homes Bonus affordable homes premium.
  • Labour plans to remove the viability loophole that “allows developers to dodge affordable housing obligations”. The party will consider a range of wider reforms to overhaul the system, including greater transparency, giving councils powers to “claw back” greater than expected profits where developments don’t include the required amount of affordable housing. Standard guidance would be set out on the Section 106 process while a team of independent viability experts would be appointed to back up councils who are in negotiations with developers over affordable housing.
  • The party will introduce a presumption that there is no development without affordable housing, including smaller and rural sites, and end the avoidance of affordable housing obligations through permitted development.
  • Labour supports and will encourage off-site production of affordable homes, consulting on how to expand the practice.
  • Apprenticeships would be a condition of receiving housing grant. The party plans to explore a national affordable housing training scheme for graduates.
  • Following the Grenfell Tower disaster, Labour plans to make safe homes for all the very highest priority, with sprinklers fitted in high-rise blocks and fire safety as the first standard in a new Decent Homes 2 programme.

The green paper is now out for consultation and wider debate. Labour welcomes “views and more detailed work to help develop our plans”. Housing for the Many can be found on the Labour Party website.

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