Labour’s Lyons Review has sacrificed housing crisis solution to prop up first-time buyers

The Labour Party has been accused of using the Lyons Review to sidestep responsibility for any genuine solution to the housing crisis, favouring a politically safe focus on first-time buyers that will only serve to prop up a broken market.

Private renters have effectively been sacrificed to the interests of existing homeowners, private housebuilders, landowners and developers, according to the campaign group Generation Rent. To say the organisation is disappointed with the outcomes of the Lyons Report rather puts it mildly, and it is clearly little consolation to the group that representative bodies for private landlords are less than happy too.

According to Alex Hilton, of Generation Rent, Labour’s problem is “[t]hey don't want to spend any money and they don't want to interfere with a failed housing market”. This left the members of the Lyons review panel with an “unenviable straightjacket”, he suggested. Given such constraints, Hilton said they “broadly did their best” but in his verdict the recommendations in the report published yesterday lacked inspiration.

“It's not that the report has a lack of ambition, the problem seems to be that the ambition was not to solve the housing crisis but to come up with a set of proposals that neither have a negative impact on house prices nor have any cost implications for the Treasury,” he added, writing on the organisation’s blog.

“As a renter, my heart sinks as this represents a political willingness for me and for people like me to be exploited in perpetuity to the benefit of homeowners, landowners and property developers...

“While I understand the political desire not to upset homeowners and rich people, I can't understand why it's ok for taxpayers and renters to continue to subsidise their own exploitation for the foreseeable future. Help to buy, Rent to buy, shared equity and shared ownership are ever-more complicated ways of getting a generation of people into hideous debt so that they can prop up the house prices and land values of much more wealthy people.”

Landlords are none too happy either, if the sector’s two main representative bodies are anything to go by. The National Landlords Association (NLA) was rather perturbed by proposed restrictions on the buy-to-let market, suggesting they are being punished for large investors who buy up properties to leave empty.

“It is entirely understandable that Labour want to prioritise first time buyers by giving local authorities the power to restrict both buy to let, and buy to leave sales of their pledged 200,000 new homes by 2020. However, without imposing new covenants or planning restrictions, which would risk scaring off investors, home-owners and lenders alike, it remains unclear how they could achieve this goal,” said Richard Lambert, the NLA’s chief executive.

“Furthermore, we’re concerned that Labour has chosen not to distinguish between buy to let and buy to leave transactions. It’s only large scale investors who buy properties and leave them empty; not landlords. Landlords collectively put in the region of £20bn into providing housing for rent last year alone; a clear demonstration of how vital it buy to let has become to the provision of housing in the UK.

“And although the perception exists, in reality there’s very little competition between landlords and first time buyers. Restricting up to 50% of potential buy to let transactions seems unnecessary when just 14% of total mortgage transactions are either buy to let or buy to let re-mortgages, and often the types of properties that landlords and first time buyers are attracted to are very different.”

The Residential Landlords Association accused Labour’s review of failing to offer support to the private rented tenure, and not only that – it’s far too focused on London over the rest of the country.

The organisation said that between 1986 and 2012, according to its analysis of CLG figures, of the five million homes created, 57% were privately rented. Individual landlords are also investing £50 billion a year in new homes to rent.

“We welcome the report’s objectives to beef up the role of housing in Government, but the reality is that to secure the homes it needs, greater support has to be given to the provision of homes to rent,” said Alan Ward, the RLA’s chair.

“This report will choke off investment in the only housing tenure that has been growing and risks taking the country backwards. Perhaps little surprise as the reports’ commissioners didn’t include a representative of the private rented sector.

“[The] report falls into the trap of being too focused on the capital to the detriment of the rest of the country. We need a one-nation housing policy, not a one London one.”

Councils, meanwhile, had their own concerns.

"We are pleased the Lyons Review recognises the central role councils need to be given in ending the housing crisis, but it is disappointing it has not recommended removing the housing borrowing cap, which is the single biggest obstacle to delivering the thousands of homes the country desperately needs,” said Councillor Peter Box, chair of the environment, economy, housing and transport board at the Local Government Association.

"The housing borrowing cap is fundamentally flawed and places unnecessary restrictions on the amount of money councils can invest in housing. Until this is removed councils will continue to be hampered in our efforts to provide the homes residents need.

"It is positive that the Lyons Review has also recognised the importance of giving councils a lead role in speeding up building and making sure increased land values benefit communities through investment in schools and roads. We are pleased the review has listened to our calls and proposed reforms to Right To Buy.

"The LGA has set out plans which, if adopted by the next government, would see half a million extra new homes built over the next Parliament, transforming the lives of hundreds of thousands of families. But to do this, we need an immediate removal of the housing borrowing cap, as well as changes to Right To Buy, the creation of council-led local land trusts and a meaningful incentives scheme to encourage developers to speed up building.

"Councils have set a precedent in the past and shown they can deliver housing on a large scale. It's time national politicians learned from the past to build for the future and we hope all parties make housing a priority in their manifestos."
Meanwhile, Julia Evans, chief executive of BSRIA, who also a member of the review commission, said: “To deliver the number of new homes required will need leadership from Government and we are fully supportive of the proposal put forward in the review for Housing to be a priority for Government.”

“To ensure that there is focus on housing at Cabinet level, we support the recommendation of appointing a dedicated post of Housing Minister and the establishment of a cross department housing task force supported by an independent advisory Housing Commission.

“We have a real crisis when it comes to the shortage of skills facing the industry and we need to act now, if we are to meet our targets. There are a number of issues that we are facing: firstly attracting new entrants into the construction industry, the CITB and the industry itself must engage with schools and colleges to present the industry as a positive career choice, and the second area that we need to consider is the upskilling of staff to ensure the workforce has the necessary skills for the technology and techniques required by the industry.”

“We are particularly pleased that the Review has recommended that the Government re-affirm its commitment to a genuine zero carbon standard for new homes, further action will be required beyond 2016 which will need to focus around the performance gap.”

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