Rachel Reeves Spring Statement housing pledge has to be a joke. Right…?

In the chancellor’s Spring Statement, Rachel Reeves pledged £2bn to fund 18,000 social and affordable homes. That’s 1.2% of the 1.5m houses the Labour government plans to oversee the construction of this parliament. Reeves did say that this is an initial investment. But such a low percentage is surely a con; more so when Reeves has not made clearly how many of these 18,000 will be social housing as opposed to the more expensive affordable ones.

Labour’s housing policy: fail

The injection of more supply at a 5% increase in total homes will bring down house prices. But the Office for Budget Responsibility (OBR) predicts this impact will be a negligible 0.9% by 2029. That further suggests Labour will outright fail to get a grip on the housing crisis.

Indeed, Common Wealth warned in February that Labour’s housebuilding programme risks being dominated by private equity firms charging eye-watering rents in the Build to Rent sector.

The thinktank pointed out that Build to Rent properties in the UK have increased to 20% of all new builds in recent years. And it’s 27% in London. Reeves’ earmarked significant investment for the Build to Rent subsector in her October budget. That’s despite Resolution Foundation analysis revealing that over one million children would actually not be in poverty were it not for shocking housing costs – in particular private sector rents.

Homes not assets

Instead, the government could treat housing as necessary shelter rather than ‘assets’. It could mandate them as affordable with prices reflecting wages. Landlords banked £56.2bn in rent from young people alone in 2024. This passive income extracts wealth from the majority and hands it to the already wealthy. If people owned their homes through a viable price control scheme, it would also dramatically increase the disposable income of the majority of the country. This would create a boom for business through higher demand for goods and services.

In the spring statement, Labour further pledged to fund 60,000 new construction worker jobs this parliament through various programmes in an attempt to ensure that the homes can actually be built. The thing is, the industry has warned that it actually needs an additional 225,000 workers by 2027 to build the 1.5m homes.

Another key issue is the volume of empty homes in the UK. The number of homeless people – at around 354,000 is a 14% rise on last year. That could be sorted through the 1.5m vacant properties in the country. Labour is building 1.5m new houses, ignoring the same number of empty ones.

Short of stopping treating housing as an asset altogether, social homes are a better option than sky high private sector costs. But analysis from Crisis shows that there was a net loss of over 180,000 social homes over the past 10 years through sales and demolitions outpacing builds.

So Labour’s current pledge of 18,000 new affordable homes, without stating how many will even be social, is a joke.

Featured image via the House of Commons