Following a hotly contested leadership campaign, we wanted to cut through the noise and establish what the new Leader of the Opposition, Jeremy Corbyn MP, really thinks about development. We’ve taken a look at his manifesto on the subject, ‘Tackling the Housing Crisis’, (August 2015) to see what Corbyn in government might mean for developers.
Building more homes
Unsurprisingly, Mr Corbyn believes we need to build at least 240,000 homes a year, which was Labour’s ambition at this year’s General Election. Also unsurprisingly, he does not believe that the market can deliver these numbers; in his view, local authorities must build more social housing. To fund this, he proposes the creation of a National Investment Bank to support new housing projects with low interest rates. Loans would be available to councils and developers – so long as they meet strict conditions on affordable housing provision. He would also lift the borrowing cap on the Housing Revenue Account to allow local authorities to raise more to fund new housing.
Regulate, regulate, regulate
As a consequence of his belief that the housing market is failing to meet housing need, Mr Corbyn proposes more regulation of both developers and landlords. He advocates a Land Value Tax on undeveloped land with planning permission, alongside ‘use it or lose it’ measures (again, espoused by Ed Miliband back in May) and compulsory purchase powers to allow local authorities to ensure sites are brought forward. The document also sets out concerns about properties being bought off-plan and left empty (‘buy to leave’), suggesting variable council tax rates as a potential solution.
Affordability is a key priority for Mr Corbyn and underlies a number of his other policy statements. To this end he would like to see greater regulation of the Private Rental Sector. His proposed package of measures include regulation of private sector rents, re-examining the definition of ‘affordable’ housing, and licensing and registration of landlords. A number of these positions have already been put in place by Labour-led authorities such as the London Borough of Newham and Oxford City Council, suggesting some support for this at a local level in the party.
‘Tackling the Housing Crisis’ highlights Right to Buy as a threat to affordable housing supply and local government finance. Mr Corbyn opposes the Government’s proposed extension of Right to Buy to housing association tenants and would like to see councils in areas of high demand given the right to suspend Right to Buy for their own properties. This is a flagship Conservative policy – expect a major clash with the Government on this.
Interestingly, Mr Corbyn also made a point of addressing rural policy during his leadership campaign – calling for a return of regional housebuilding targets to guarantee delivery of housing in all parts of the country, and opening a consultation on how the party can rebuild itself in the countryside. Given that this highlights housing as his first priority in this area, this might signal a push by rural Labour CLPs on development.
Setting the tone
Jeremy Corbyn is not Prime Minister and his policies are not Government policies – but his statements are likely to set the tone of debate with the Conservatives over the coming months. He has been strident in his criticism of a housing market that he believes is failing and has called for a greater role for Government both in building new homes and regulating the housing market. Labour’s conference later in the month will be the test here – with a newly emboldened membership and MPs moving on uncharted territory, it will be interesting to see if Conference endorses his views.
The key impact for developers however is likely to be at a local level – and depends on the degree to which Labour councillors feel able to adopt, while working to the Conservative Government’s rules. Mr Corbyn’s positions on affordable housing and delivery match those taken by a number of Labour-led authorities such as the London Borough of Hammersmith and Fulham. If others follow suit, developers will face a tougher time when operating in Labour-controlled authorities and face more scrutiny from Labour councillors on issues such as affordable housing.