Hammering landlords with building safety rules, the Renters’ Rights Act and tax rises hampers new supply and drives up rents. But Britain’s hopeful TikTok prime minister could take a different direction in a bid to drive growth, says Andrew Teacher
For many Jewish Londoners, the Green Party’s vote on Zionism on 4 October consigned the party to the dustbin of unelectability, recalling racism that many remember from the British National Party’s brief resurgence in Barking and Dagenham back in 2006.
But the Greens’ stance on Zionism isn’t the only snake oil they are peddling. Their demands for rent caps and their wasteful use of local taxpayers’ cash to sue London mayor Sadiq Khan over his pragmatic approach to encouraging housebuilding (reducing the quota for accelerated consents from 35 per cent to 20 per cent affordable housing) demonstrate the potential of the far left to make a bad situation worse.
Hackney and Lewisham, both now led by Green mayors, spent £68.2m and £93m respectively on temporary accommodation in 2024/25. Tower Hamlets, led by Aspire, spent £67.6m that year. Yet all three are taking legal action against a policy intended to get more homes built.
For years, everybody but the property industry itself could see that regulation was coming. And, as someone working in the sector for 20 years, it’s wholly needed. But, as with any sector – financial services, teaching, driving Ubers – regulation that treats everybody as a criminal is never going to fix a broader problem (not enough quality homes to rent).
Any smart politician will be looking at demographic data right now and spotting that the rental crisis that has been brewing for years results from a spider web of damaging policymaking. Ironically, until recently, property development has typically been more buoyant under Labour.
Policymakers have ignored warnings around the need to focus on driving the supply of rental housing, while catering to tabloid front pages with expensive gifts to first-time buyers. We do need to help first-time buyers as well. But the housing market is a market and needs to work for everybody, not just one narrow group.
Tax raid
It was George Osborne’s tax raid on buy-to-let landlords, removing generous allowances for mortgage interest, that began the slide to where we are now. This was combined with an even more damaging smash and grab on housing associations, where social rents were cut by one per cent a year for four years, wiping tens of billions of pounds off social landlords’ balance sheets, literally overnight. Its legacy was that cash for maintenance evaporated, leaving a plague of damp and mould now being cleaned up at the expense of Britain’s poorest souls.
What most politicians now fail to understand is that housing is an ecosystem and that bad policy has a wealth of (often unintended) consequences. You need all parties to be thriving: buy-to-let, funded by mums and dads happy to lock up their pension savings for pretty modest returns; build-to-rent developments funded by local government pension fund cash and insurers; volume housebuilders, whose shareholders are – you’ve guessed it – many major pension funds; as well as charitable housing associations, which have increasingly been stepping in to fill the societal gaps left by council budget cuts over the last 18 years.
Much has been made of Burnham’s promise to focus on council housebuilding. This is an admirable objective, as are many other unfunded promises currently on the table. The reality is that, unless the taxpayer wants to fork out the best part of £20bn extra per year, the current gap in social housing provision isn’t going to be closed anytime before 2040.
Therefore, if we’re even half serious about returning this country to growth and providing the housing London needs for key workers, first-time buyers and anybody else reading this newspaper, there needs to be an overnight change of tack.
Moves to cut stamp duty are absolutely essential, not least for pensioners rattling around in houses far too big for them. Hammersmith and Fulham Council has talked up its provision of social care for people living in their own homes, but providing the right kind of senior living for oldies that stages care up as they require it would make more sense.
Similarly, where the barrel-load of over-the-top rules, such as the requirement for a second staircase in new blocks of flats with a storey 18 metres or more in height, has contributed to the viability crunch we’re seeing in housing, Burnham should use some of his political capital right now to row back some of these rules. Most of these can be blamed on Michael Gove, who, whilst housing secretary, was locked in a fierce battle with FTSE 100 housing chiefs.
The irony of the anti-corporate sentiment against City housing bosses by many planners is that Berkeley Homes, the biggest listed developer, has been providing more affordable housing than any other organisation over the last couple of years. But, like other listed housebuilders, it is now returning cash to shareholders and shrinking its balance sheet.
The pile-up of taxes, regulatory barriers, debt costs and construction price inflation is making things impossible. Politicians would tell you it’s all about planning, but that’s the least of anyone’s worries.
Government can’t be blamed for the rising cost of steel or concrete, or even interest rates. But it could make interventions tomorrow that could help unlock many of the stalled sites across London. Earlier this year, Molior put London’s unbuilt residential permissions at around 300,000 homes.
Across London now, some councils are using the plethora of unbuilt sites as “evidence” that new schemes should not be brought forward, ignoring the obvious point that many consented sites are unviable. This needs to stop because it’s simply exacerbating the supply crunch we’re seeing.
Whilst the Building Safety Regulator is performing better now, investors’ appetites for funding tall buildings are indelibly scarred, and only a drastic policy shift will erase this.
The property sector also needs to evolve. Over-specification of schemes, with an “amenity arms race” often driving up costs by including facilities people don’t need, has not helped. And most institutional investors are now favouring more modest designs to bring down costs, which can only be a good thing.
Yet the anti-capitalist sentiment, the zero-sum, us-and-them aesthetic and economically illiterate social media posts on housebuilder profits are undermining an opportunity for politicians to win votes by jumping on a bandwagon of positivity that could help deploy many of the billions of pounds of global capital that wants to find a home in London.
There will always be examples of key workers stacked up illegally in HMOs, living at risk in substandard accommodation. Such criminal activity from rogue landlords will always, sadly, be a part of living in any city. We should provide the funding councils need to stamp this out.
But if, in the process, we stamp out investment and drink the snake oil of the extreme left, the Tiktok generation living at home with their parents because they can’t even afford to rent is not going to thank us for it.
Andrew Teacher is a co-founder of Lauder Teacher