In this winter edition of Anticipations, Editor Louie Woodall interviews Shadow Minister for Housing. Emma Reynolds. See the magazine for the full version of the interview.
The shortage of safe, affordable homes is one of the most shameful failures of successive governments, both Labour and Conservative. The coalition’s single-minded commitment to austerity has only exacerbated the situation, and entering 2014 it is no exaggeration to say that Britain faces a housing crisis.
It is only right, therefore, that housing is a red-hot issue for Labour. The people’s party needs to demonstrate its commitment to providing appropriate shelter for all who live here, regardless of circumstances. It’s a tough ask. It needs someone just as tough to tackle it. Enter Emma Reynolds, Labour’s Shadow Minister for Housing and MP for Wolverhampton North East.
“Housing is central to everything we want to do in government,” she says. “It’s one of the reasons I’m in the shadow cabinet [to produce joined up policy on the matter]”.
Reynolds is only the second MP to hold the housing brief at a shadow cabinet level. Miliband promoted the role as a sign of its importance to his One Nation agenda, and in recognition of the need for the appointed shadow minister to work with cabinet colleagues to sort out the housing system root and branch.
“Housing cuts across different areas. [I need to work with] Tristram Hunt in terms of making sure that families with children aren’t shunted round the country, as children who move house a lot don’t do so well in school. Also with Liz Kendall [the Shadow Care Minister] in regards to elderly care and looking at properties more suitable for people in retirement, and therefore freeing up a bit of space for younger people coming in or families that want to move to a bigger property. I also have to consider the health implications of people living in a poor standard of housing, especially in the private rented sector where a third of housing is regarded as non-decent”.
A joined-up approach is welcome, but what is Labour’s substantive policy when it comes to housing?
I quiz Reynolds first on the private rented sector. This January at the Fabian Society annual conference, Ed Miliband made waves with the announcement that Labour would introduce a national register of landlords to enable local authorities to root out rogue operators and prevent a 21st century resurgence of Rachmanism. It sounds like a common sense policy to purge the private rented sector of dodgy practices and ensure there are good landlords operating in the areas of most need. But how will it work in practice?
“Some local authorities are actually already doing this [registering landlords],” says Reynolds, “but they’re having to jump through a lot of hoops to introduce licensing because at the moment if you want to license a landlord in a specific geographical area you have to provide evidence that there’s either anti-social behaviour or low housing demand in that area, or if you do what is called additional licensing like they’ve done in Oxford, you have to define [what the licence covers], so in Oxford its only for houses for multiple occupancy,” she adds.
She explains that the schemes in place at a local level require prospective landlords to buy a licence from a local authority, which first inspects the properties they wish to put on the market to check they are safe, secure, and that they meet strict criteria on living space. For example, a bedroom can only be designated a bedroom if it is larger than a certain size, and in houses for multiple occupancy there has to be sufficient bathroom facilities for all residents. “Local authorities want to introduce more licensing, but don’t feel that they’re in a position to do so. We want to give local authorities greater power to do that,” adds Reynolds.
She adds that the policy’s end goal would be to create a professionalised private rented sector where institutions and experienced independent landlords can offer a range of suitable properties to tenants and are willing and able to look after the property throughout individual tenancies.
“If that’s a barrier to entry, then so be it, that’s a good barrier to entry in my view,” she says.
Moving on from the private rented sector, I ask Reynolds what she’s been working on in regards to arguably the most pressing housing issue right now: lack of supply. We are currently living through the lowest period of house building since the 1920s. The charity Crisis estimates that we need to construct approximately 250,000 houses a year just to keep up with demand. We’re currently averaging 100,000.
Labour is committing to building 200,000 houses a year by the end of its first term back in power, a target that is “ambitious but realistic,” according to Reynolds. But how can a Labour government achieve this level of house building?
The key is to incentivise developers to build on the land they own, rather than hoarding it in anticipation that prices will rise- a practice known as landbanking. The so-called “use-it-or-lose-it” policy unveiled by Miliband seeks to spur developers to construct properties by threatening them with fines and compulsory purchase orders (CPOs) if they don’t. On paper, it sounds like a crude bit of policy, all stick and no carrot, not to mention that it assumes what underlies the supply problem is the greed of developers, rather than a lack of suitable land to build on.
Reynolds explains that the Lyons Commission, the independent enquiry set up by Labour to look into solving the housing crisis, will take a more nuanced approach to landbanking than the popular press assume.
“Lyons is going to be looking at companies that landbank [using sites] with planning permission, but also strategic landbanking, which is when [developers] buy up land that they don’t have planning permission for and sit on until the value rises,” she says.
This is an important differentiation. All developers maintain a landbank as a form of investment to smooth returns in unprofitable years and ensure plots are available to them for future development. This on its own is sound business practice. What Reynolds is saying is that there is a different type of landbanking cropping up- this strategic landbanking- which goes beyond this principle and artificially inflates the price of property to the advantage of no-one but the developer. In these instances, developers aren’t looking for opportunities to build on acquired land. They’re simply speculating that these plots will rise in value to skim off a profit. Labour rightly wants to clamp down on this predatory capitalism.
In addition, Labour is considering updating the government’s local plan system to ensure councils take a more joined-up approach to assessing housing need in a fixed area.
“[Currently] local authorities don’t have a common methodology for assessing housing need. One council can say ‘we really only need this many houses,’ whereas if they’d coordinated with another local authority, they’d find the real need was greater. Some authorities underestimate the number of houses they need, and some do not, so to get around that you should have a common methodology for identifying housing need,” says Reynolds.
One quick way to liberate housing stock is to incite property owners who don’t actually live in the homes they own to sell up. In times of great hardship, it is unfortunate at best, morally repugnant at worst, for so many homes around the country to be standing empty because their owners live and work overseas. This is a particularly acute problem in London.
“We’re looking at what we can do [in London),” says Reynolds. “Developers are simply designing apartments that are only appropriate for very, very rich foreigners to come in and buy as a sort of sophisticated piggy bank and nobody's living in these properties.” I can sense her frustration. In London, rents consume about 50% of average earnings. Part of this cost is down to the price inflation in a city that has become a magnet for property tycoons.
“One of the things I have talked about is giving local councils the power to escalate the council tax charge,” she explains. “At the moment, if a home is empty for two years, you can charge up to 50% more in council tax. However, that means a massive amount of work for the local council in terms of proving that the flat is empty for two years- they have to keep going back and checking- and even then is a 50% increase that much of a deterrent? Perhaps not.”
She proposes a reduced waiting period before councils can hike the tax on vacant properties, and devolving power to local authorities to amend the charge above the 50% limit. This is something Eric Pickles MP has been reluctant to allow when pressed by some local councils, like Camden. Reynolds thinks Labour should be much less reticent.
But what about those for whom any shelter is out of reach: the homeless? Reynolds is adamant that more needs to be done to help those shut out from housing entirely- and she’s keen for Labour councils to do all that they can now rather than waiting for a Labour government to clear up the Tories’ mess.
“Homelessness is up by a third since the general election, as is rough sleeping,” she explains. “Good Labour local authorities will have strategies to deal with homelessness. One of the big things that my predecessor, Jack Dromey MP, organised was the Young Peoples’ Homelessness Parliament this time last year, where there was a discussion with Jack Dromey, Hillary Benn MP, Nick Bowles MP and the Speaker [with a group of 100 young homeless people], and they were then asked to vote on the things that were most important to them in terms of what could be done [to improve their situation]. They said the joining up of different services [was most important].”
These services are being slowly unwound by the present government, meaning the safety net that was once there for those at-risk or already on the streets is now full of gaping holes.
“Local authorities have a statutory duty to put families into temporary accommodation, but you don’t have any statutory duties for local authorities to deal with homeless individuals, something that Crisis are very keen on changing. We’re not proposing that yet, but we are looking at whether what we’ve got [for homeless single people] is adequate.”
Getting to grips with the scale of the housing crisis needs someone with a sharp mind, quick wits, and passion to lead the debate and pioneer innovative solutions. Thankfully, Labour has in Emma Reynolds a woman who is perfect for the job.
Louie Woodall is Editor of Anticipations