Miliband’s housing plans are positive – but unless the government builds homes, we’re just “going round the houses”

Ed Miliband’s plans which he’s announcing today (and in some cases building on arguments he made at conference) should be welcomed. The lack of housing in our country is one of the nation’s greatest blights. House prices are being forced up to increasingly unsustainable levels. In London especially, a toxic combination of “Help to buy” and overseas investors means that buying a home is an unattainable dream for all but the wealthiest of London’s citizens. Our capital is becoming a city for the super-rich and the rest of us just have to cling on and hope we can afford the ride.

Elsewhere, rising house prices not only mean the opportunity to own a home is disappearing, but the ability to rent a home is tough too. Young people are increasingly being forced into shared housing well into their thirties out of cost rather than choice. Families are all too often crammed into homes that are too small – with knock on effects on education and life chances.

Meanwhile, the UK builds less than half the number of homes it needs to reach demand each year – expanding the housing bubble even further. And the rich become richer, and the poor are forced into worse and more cramped accommodation. It’s grotesque, and it needs to stop. And despite the en masse clutching of pearls this will engender from certain quarters, that means house prices will need to come down.

But for that to happen, more homes will need to be built, and Miliband has set Labour a reasonable target – 200,000 homes a year – and a means of boosting house building. And as he bashes the house builders – who have a great deal to answer for – he’s on comfortable ground. The “big four” have seen their profits spike in profits of 557% since the Tories came to power. That’s despite some of the lowest levels of housebuilding on record.

It’s boom time for the house builders, but it’s desperation time for anyone who wants or needs their own home.

So Miliband’s plans to interfere in the market are welcome – tackling land hoarding, forcing recalcitrant councils to allow house building and providing incentives and benefits for housebuilding are all to be welcomed. All will have a tangible impact on the number of houses that will be built under a Miliband government. (I’m less sure about encouraging “self-build” – Britain may watch Grand Designs but I doubt many want to take on the task themselves).

But there’s one major market intervention that Miliband doesn’t seem to be endorsing yet. And it’s the biggest one of all – the government stumping up the money for housebuilding directly. Or to put it another way – building quality, affordable, (council) housing. That can be done either directly as social housing or as part of a social/private housing mix, but either way would require significant government investment in solving one of our society’s great ills.

But of course there’s “no money left” – and building a million or more homes would cost billions. Except housebuilding is one of the few politically acceptable ways that the government could spend significantly more (such is the need for greater housing supply). House building is popular – and polling we commissioned from Survation earlier this year showed that a majority of the public back borrowing to build council housing and create jobs. Similarly, John Healey has made the case for “good borrowing”.

What Miliband proposes today is a good start. It pushed the need for greater housing stock back onto the Westminster agenda and it shows that Labour understands many of the underlying problems that are impeding housebuilding and driving up prices. But I fear that these proposals, on their own, still won’t be enough. The best way for a Labour government to ensure there are more homes is to invest in building them.

Everything else just feels a little like going round the houses…