On Wednesday morning, Labour’s Tooting MP Sadiq Khan kicked off the next stage of the London mayoral race by delivering a speech at the Labour Party conference in Brighton. No prizes for guessing the content of the speech: it was, as everything related to London politics is, centred on housing.
While housing is of course a major issue – one that needs discussing – more often than not, the policies promoted by politicians, and particular the Labour Party, read more like a wish list. Sadly much of what we heard was the sort of thing you expect to be peddled by a students’ union as their ‘manifesto’, rather than from a serious party of government.
If elected mayor, Khan said he would introduce a ‘London living rent’; no details on what that would be and who would set it, mind you. Looking past the spin, this is nothing more than a rent cap. And all rent caps do is deter investment, as nobody invests in a falling market without room to grow or recoup the huge up-front investment costs housing requires. Without such investment, the demand-supply imbalance would be further widened. In short, Khan’s move would exacerbate the crisis.
It is very true that rents in London can be extortionate, with many having to pay half of their salary on rent. But we come back to the point; policies from a prospective mayor of London have to a) be anchored in reality and b) improve upon the status quo rather than infecting it with outdated ideology.
Khan then raised the reliable bogeyman of ‘overseas investors’. Foreign investment is a good thing, plain and simple. People the world over want to invest in London and Britain, and we must continue to encourage that. Yes, we need to weed out money launderers but these guys are in the tiny minority. We also need to reduce property speculation but at the same time must accept the fact that banks will often only lend money to build homes where many are pre-sold.
This sort of descent into dog whistle politics isn’t necessary. Not all foreign money is dirty, and not all dirty money is foreign.
Like the rent cap, if investment is restricted, the problem only gets worse. Foreign investment finances market housing, social housing and supports jobs and growth in the capital. This diversity of ownership makes the London property market the most resolute in the world.
Khan set his crosshairs on “big developers” who have been let “…off the hook when it comes to building affordable homes.” Khan, with his team, would stand up to them and “insist that half of all new homes are genuinely affordable.” I’m sure many developers could do more to speed up the process and deliver more homes, both affordable and market rate. But Khan seems to place the blame firmly at their feet. Developers want to build. It’s their raison d’etre. It’s what they’re in business to do. So it’s strange to solely blame them, and not ineffective local councils or a suffocating planning process, which so often hold up developments.
Labour’s shadow housing spokesman John Healey, a former minister, has suggested the State should step in and build homes while debt is cheap. This makes sense. The government controls much of the spare land – either directly or indirectly through bodies like the NHS, MoD and councils. Plenty of developers would happily build on contract and the thousands of people on housing waiting lists would create a ready-made, government-backed income stream in rents. It is so far the only policy from any political party which explains how the building will be accomplished.
We all know there’s an issue with housing in London, but when you cut through the rhetoric it just doesn’t look like politicians want to actually build. While the Tories have sought to placate Nimby homeowners and the elderly with rules which allow locals to stop stuff happening, Labour want to regulate the free market out of existence.
Khan’s proposed policies will no doubt be popular with people who don’t understand the realities of development. Placing the blame at the wrong door will only serve to cut housing supply. London deserves a more responsible approach.