The Insider

The government’s housing failures

How the government failed renters—and homeowners

March 27, 2024
Image: PA Images / Alamy Stock Photo
Image: PA Images / Alamy Stock Photo

The housing catastrophe is an unusual one for this government in that for once it had some of the right policies—and then proceeded systematically to undermine them.

This starts with the sheer lack of homes, particularly in London and the south-east. The UK has nearly 10m fewer homes than France, for a population not much smaller, and we are building new homes at only about half the rate of the French. We are also building at far below the rate of the 1960s, the last decade when housing was a top political priority, when numbers topped 400,000 a year, with a roughly even split between private and council builds.

What was the government’s policy, set out in the “levelling up” manifesto of 2019? It was a repeat of Harold Macmillan’s boast of 300,000 new homes a year, a pledge which Macmillan delivered, and which was critical to him becoming prime minister in 1957. This was the right policy, signalling an apparent determination to deal with the problem of chronic unaffordability. 

Yet neither Boris Johnson, nor his various successors and still more various levelling up secretaries and housing ministers, have come close to meeting their 300,000 annual target. Last year the number of new completions was barely 212,000. 

A whole host of measures would be needed to reach the 300,000 figure, including a surge in local authority council building with central government funding. Almost none has been forthcoming, and local authorities remain largely unempowered and underfunded to build new homes at scale as they did in the postwar decades. A programme of densifying the large, low-density postwar council estates which dominate so many of our cities, particularly inner London, could yield tens of thousands of new homes each year at affordable rents and sale prices, yet this hasn’t happened at scale. 

There is also a general recognition that the national target requires top-down homebuilding targets for each individual local authority, to overcome the nimbys who block even the inadequate number of development proposals currently submitted. And that was government policy. But what did Sunak do last year? He abolished the local targets, in response to pressure from nimby Tories in the Home Counties in particular, where the homes are needed most. 

Then there is the plight of England’s leaseholders, forced to pay a range of unregulated charges on top of their leases, and the army of renters liable to eviction at almost no notice and for no reason. What did the government promise here? To regulate the unfair charges, particularly the historic anomaly of ground rents which are totally unjustified in respect of leaseholders who get nothing in return; and to stop no-fault evictions of tenants who rent. 

After four years of foot dragging, the landlords have won out in the battle for Sunak’s ear and neither the abolition of ground rents for leaseholders, nor the ending of no-fault evictions for renters, are now to go ahead. This leaves a gaping hole in the middle of the Leasehold Reform Bill currently going through parliament, and completely undermines the Renters Reform Bill which is now unlikely even to become law by the election. 

Homeowners haven’t had it any better. The surge in interest rates has sent their mortgage payments through the roof in the space of barely two years. Since the surge was exacerbated by Liz Truss’s irresponsible mini-budget of unfunded tax cuts, which forced interest rates suddenly higher, the government can’t pin the blame solely on “the market” and the need to counter inflation. The mini-budget was a deliberate act to undermine what had been a Tory prime constituency: homeowning families.  

It is a dismal record of non-delivery and dashed hopes. Time for a new government to try harder.