A year of progress for Labour still leaves major gaps to be filled

Posted: July 4, 2025 | Author: julesbirch | Filed under: Fire safety, Homelessness, Leasehold, Planning, Private renting, Social housing, Welfare reform |Leave a comment

Originally written as a column for Inside Housing.

A year into the Labour government how should we assess its record on housing?

It’s not hard to find reasons to celebrate, from the spending review announcement of £39 billion for the Affordable Homes Programme to the creation of a National Housing Bank within Homes England armed with an extra £16 billion in financial transactions capital.

Social rent is the priority after years when it was under threat of extinction and will account for 60 per cent of the renamed Social and Affordable Homes Programme (SAHP).

Social landlords have got what they asked for on rents and the long-term plan for social and affordable housing sets out how they must improve their existing homes, professionalise their staff and give tenants more access to information. 

The prospect of new financial flexibilities for local authorities and restrictions on the Right to Buy offer council housing its best opportunity in years to escape the straitjacket imposed by central government. 

But there are still many gaps to be filled when Labour sets out its wider plans in a long-term housing strategy and publishes its homelessness strategy. 

Planning reforms have been delivered but there not yet much evidence of increased housebuilding making homes more affordable. 

Despite some promising early signs, progress seems to have stalled on building safety and leasehold reform.

And there is no sign yet of a welfare system that will ensure that housing costs do not push even more claimants into poverty and homelessness.

Taking the good news first, what’s striking is how much of it depends on Labour being elected for a second term. 

The spending review, for example, covers the next four years but the £39 billion for the SAHP is for ten years and is heavily backloaded into the 2030s, with the budget increasing to £4 billion in 2029/30 and rising with inflation after that. 

By my calculations, that leaves £13.3 billion or £3.3 billion a year in this spending review period. That compares favourably with £2.3 billion a year under the current AHP but is about the same as the £3.1 billion allocated for 2025/26 once £800 million in Labour top-ups are included.

The backloading goes wider than that too: the housing bank is expected to support 500,000 new homes over its lifetime of which just under 60,000 will be in this parliament; and preferred sites for the first generation of new towns are due to be announced this summer but they will only start to deliver substantial numbers of homes in the 2030s.  

Much of this is inevitable – it takes time to ramp up investment and make progress on supply – but it also means that much depends on who wins the 2029 election.

True, last month’s announcements set a baseline for future spending reviews and some of the future SAHP may already be contractually committed by then, but the outcome currently looks a lot less certain than it did after last year’s Labour landslide.

A Labour second term or left-wing coalition might mean further top-ups to come – they will be required if is to move beyond what is a solid start that still falls short of meeting housing need. 

But if one of the right-wing parties wins much of that funding and many of those homes could be in jeopardy. 

The Conservatives are already retreating into their ‘leave it to the market’ comfort zone, while Reform will claim immigration is the real problem. Both could come  to power pledging to scrap Labour’s new towns and both could quickly launch DOGE-style cuts to the programmes they inherit. 

Back in this parliament, it’s clear that a backloaded SAHP will make a limited contribution to the government’s key manifesto target of 1.5 million additional homes over this parliament. 

Hardly anyone believed this was possible in the first place, but indicators such as planning permissions suggest that the sales market may be going backwards.

However, policies like planning reform and new towns were always going to take time to make an impact: the important point about new supply is not achieving 1.5 million in isolation but delivering a sustained and long-term increase in housebuilding. 

The government has backed that up with a 10-year infrastructure strategy. This looks at the water, energy and transport connections needed for new development as well  as social infrastructure like doctors’ surgeries. 

In advance of the long-term housing strategy Labour has had little to say about boosting home ownership beyond making a circular argument about the 1.5 million target.

But Keir Starmer put ownership front and centre of his article for Inside Housing about ‘keeping our housing promises’ last week. 

Speculation about a new version of Help to Buy refuses to go away but there could be alternative ways of putting the housing bank to work to boost housebuilding for sale.

Away from new homes, after a series of scandals about the condition of existing homes, landlords face heavy investment to meet new standards. 

There were welcome moves in the spending review on remediation funding for social landlords and reforms to the Building Safety Regulator should speed up housebuilding.

However, there are fewer signs of progress on existing homes despite the government’s remediation action plan, for which an update is expected soon.  

The government has also made headway on tackling leasehold, with commonhold set to be the default tenure for all new homes.

But reform is moving more slowly on existing leaseholds and currently seems to have stalled pending the legal challenge brought by wealthy freeholders. 

The same is true of reform of the private rented sector, with the Renters’ Rights Bill facing delays in parliament. That means the end of Section 21, first promised by a Tory prime minister six years ago, could potentially be pushed back to 2026. 

A homelessness strategy is imminent but ministers have so far resisted targets for cutting the record numbers of homeless families stuck in temporary accommodation. 

The trick will be to back up serious commitments with a deliverable plan for implementation, perhaps starting by cutting the number of people becoming homeless in the first place, but long-term progress obviously depends on expanding the supply of social homes.

The final issue is the one on which Labour has been tearing itself apart: welfare.

A backbench rebellion forced the government into a series of concessions on benefits for disabled people ahead of the second reading of its welfare legislation on Tuesday. 

However, the extra billions the government will have to find to fund the concessions will probably mean cuts elsewhere. The chances of ending the two-child limit and undoing the freeze in local housing allowance already looks slim previous Labour pledges to abolish the benefit cap and bedroom tax have been forgotten. 

After a year in power, Labour has made some solid progress but there are plenty of reminders of the scale of the task ahead.

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