Policy Exchange slams manifesto housing pledges

Think tank Policy Exchange has raised serious questions about the housing pledges of both major parties, following the launch of party manifestos.

The right of centre think tank, which is often linked with the Conservative Party, has published two responses to the manifesto launches, querying the delivery of both parties’ promises to boost affordable home ownership, and of Labour’s pledged £75bn council housebuilding programme.

Contained in Labour’s manifesto is a promise to build 150,000 affordable homes for social rent a year by the end of the next parliament, and deliver 50,000 homes for cut price sale to local buyers. The Conservative manifesto pledged 29,000 discounted homes for sale over the parliament.

The responses to the manifestos, written by Policy Exchange’s head of housing Jack Airey, say that the promises to raise the rate of discounted homes for sale will be difficult to deliver, because local authorities decide which types of affordable housing are required, and developers decide whether or not to build schemes out. “Despite both parties putting numbers on how many low-cost homes will be built by their government if in power, neither would have much control over the rate at which they are built,” the note says.

Airey adds that because homes for affordable sale can’t be bulk-sold in advance to housing associations, as affordable homes for rent are, this may also make some developers wary of local levels of demand. “Developers will also have to bear more sales risk.[…] If there isn’t local demand for discounted homes, developers might be left with homes they cannot sell. Understandably, they will want clear rules for the time period after which discounted homes can be converted to normal homes for market sale.”

Regarding Labour’s promise to build hundreds of thousands of affordable rented homes, of which 100,000 per year would be council homes, Airey noted that the rate of delivery promised would require production to increase 38-fold from existing levels. He said that the grant rate proposed of £100,000 per home might be “not enough” to deliver the homes, given the National Housing Federation’s estimate that an average grant rate of £183,000 would be required.

Airey said that “the large majority of the local authorities expected to build 100,000 homes a year by 2024 have little to no experience of building homes”, pointing out that two-thirds of the council homes built last year were built by just six authorities.