Home Ownership Can’t Solve the Housing Crisis

In recent weeks, Labour has confirmed its rightward drift on housing by emphasising home ownership instead of social housing and renters' rights – but embracing the market will do nothing to solve the housing crisis.

The right of first refusal on a half-million-pound new-build flat is not much use to me. In fact it’s not much use to the millions of households stuck in inadequate and overpriced housing in the UK, but ‘first dibs for first-time buyers’ was the key plank of the Labour Party’s new proposals for housing, which were announced by Lucy Powell at this week’s party conference.

The i newspaper described Powell’s speech as a ‘pivot’ for Labour, ‘who had previously positioned themselves as the party of social housing and renters’ rights while the Conservatives are the self-proclaimed party of homeownership’. The speech explained how Powell plans to fulfil her promise to ‘make the dream of owning a home a reality for every grafting Brit’.

Even if Powell had managed to express herself without appealing to nativism or fetishising overwork, there is still something uncomfortable about such a ‘pivot’. In 1872 a Madrid newspaper wrote—in an eerie premonition of Thatcher’s right-to-buy project—that ‘the cleverest leaders of the ruling class have always directed their efforts towards increasing the number of small property owners in order to build an army for themselves against the proletariat’. It has long been recognised that property-owning democracy is a powerful tool for suppressing socialism.

This is even more true in a contemporary British context, where the astonishing amounts of money that housing generates have turned homeowners into petty speculators. Many households have come to find land price gains, rather than wages, are the primary source of their wealth, and Labour’s impossible dream is to bring more and more people into that position.

This sets Britain apart from places like Germany, where the recent referendum in Berlin showed an amazing level of support for dispossessing the city’s largest landlords. The campaign was a brilliantly-pitched measure, and has resulted in a policy that is both a serious attempt at de-escalating the housing crisis and a rallying cry against housing-based wealth accumulation. Here, though, policymakers’ focus on ownership limits our horizons. Labour is encouraging us to see ourselves as a rentier nation rather than a radical one; as temporarily inconvenienced paper millionaires, with no particular wish to ensure adequate housing for everyone. The shadow cabinet would prefer to see us taking part in a system of runaway prices than standing against it.

In his recent book on ‘the decline of Tory Britain’, Phil Burton-Cartledge argues that homeowners (particularly older people) own the means of their own subsistence, and that their main worry is that something might happen that affects the value of their asset. The Tories, he argues, must aim to protect homeowners from such a disaster by ensuring that property values don’t fall. If Labour wants to win over actual and aspiring homeowners, it will be forced to adopt this position, too, which will prevent the party from supporting any meaningful unravelling of the housing crisis.

Policies that aim to increase ownership while maintaining the conditions that see homes rise in value are also practically unworkable. They imagine a fantasy market where everybody wins, where everyone’s asset appreciates while somehow fewer and fewer people are priced out. But we cannot tackle a housing affordability crisis while propping up prices at the same time.

Of course, none of this is to make a moral judgement on people who want to own their own homes. Given the appalling conditions and rents in the private rented sector, and the desperately low levels of social housing, it’s easy to understand why anyone who could afford to buy themselves out of renting would want to do so. The point is not to criticise those who want out of an unworkable system, but to understand how and why Labour is failing on housing.

Powell’s speech wasn’t all bad. It included a re-commitment to the 2019 manifesto pledge of a mass council home building programme, and an important point about not misusing the word ‘affordable’. She also talked about reforming fire safety and gave a vague hint about ‘housing as a human right’. For what it’s worth, the conference itself adopted a motion in support of a number of important policies.

But the bad outweighed the good. The party’s plan to restrict foreign investors from buying homes suggests that the shadow housing team are more serious about the optics of their policies than their feasibility. Jacinda Ardern made a foreign homebuyers ban one of her central policy pledges in 2017, and enacted it the following year in an attempt to clamp down on house price growth, but three years later things have gotten so much worse that Ardern is now publicly worried about a house price bubble.

If the Berlin proposal were implemented here, it would affect people like Fergus Wilson, who controls a buy-to-let empire in and around Ashford, Kent. Wilson was in court recently for his repetitive and abusive nuisance communications with the council, but the interesting thing about the judgment is that it shows that his operation is so large-scale that he is sort of informally responsible for housing policy in the Ashford area. Thus Wilson, who openly refuses to rent to young families and has been sued by the EHRC for discriminating against Indian and Pakistani tenants, gets to decide who gets housed and who gets evicted, whose hot water gets fixed and whose gets ignored. The Labour front bench does not seem to be particularly concerned about changing the things that make this possible.

The Berlin referendum result may have been born partly out of frustration. In April 2021, a local rent control law was defeated in the courts, and it was just a few months later that 60 percent of voters turned out to support the extraordinary step of confiscating property from landlords. At the exact same time, at the conference of one of the largest left-wing political parties in Europe, the Labour Party was openly turning towards Toryism. The question here is how much more frustration we can take before, like Germany, we insist on meaningful action on housing.