This is Home Front with Vicky Spratt, a subscriber-only newsletter from The i Paper. If you’d like to get this direct to your inbox, every single week, you can sign up here.
As the saying goes, in the end, there is only one thing that can keep political parties in office once they’ve won an election: “The economy, stupid”.
In fairness to Reeves, much of this was on the cards when Labour won the election. However, regardless of that fact, it’s now her job to fix it.
But, is Reeves looking for the robust, long-term and sustainable economic growth she needs in all the wrong places?
“The problem with the last government was that there was always somebody who said ‘we want to grow the economy but we don’t like that investment’,” she said. “We don’t like that wind farm…we don’t like those pylons…we don’t like that airport…we don’t want that housing near us. The answer can’t always be no.”
Building things – particularly homes – is generally thought to be good for the economy. A mass housebuilding drive from Labour – that’s the 1.5m new homes the party has promised – would not only create jobs, it would also stimulate the financial services industry by – in theory, at least – increasing the demand for new mortgages.
However, such a housing growth strategy is as limited as it is riddled with pitfalls. Let me explain why.
Josh is an economist with research expertise in money and banking, the economics of land and housing and sustainable finance. He is also a senior policy fellow with the UK Ministry of Housing Communities and Local Government advising on housing affordability issues and is a council member of the Progressive Economy Forum (PEF) think-tank.
In his lecture, Josh pointed out that building new homes is unlikely to reduce house prices by much more than 2 per cent overall. That means it won’t ease the affordability crisis in a major way.
In the long term it could see first-time buyers and people who need to upsize still grappling with enormous loans which run for longer and longer.
This particular plan for growth also won’t do anything immediately to ease Britain’s growing homelessness crisis.
According to the NHF’s analysis of the government’s latest affordable housing and homelessness statistics, the number of newly homeless households outnumbers the number of new socially rented homes by seven to one.
The Government’s figures show that 65,000 households were accepted by their local council as homeless last year (2023/24) including 34,200 families with children – this equates to 178 households and 94 families every day.
Indeed, the number of new socially rented homes built per year has fallen by 75 per cent since 2010.
According to NHF research, we need to build around 90,000 socially rented homes each year to meet current demand. The last time we had investment at the scale needed to tackle the current shortage was in 1953 when the government spent the equivalent of £11.35bn a year on building social housing.
Not only would building social housing reduce the homelessness bill in the long term, but it would also create jobs – not only in construction but in housing management – and, above all, it would guarantee cash-strapped councils with income via rents. If that’s not enough, it would also reduce the economic instability of those exposed to homelessness.
If this newsletter hasn’t convinced Rachel Reeves that investing in social housing and a sustainable housing market is a smart play, she should take a look at some interesting new polling from Ipsos which has been published today.
It has found that most people do not think rising house prices are “a good thing”.
So, there you have it. People think Reeves should grow the economy. Not house prices.
They make for heartbreaking reading.
These numbers were obtained from the National Child Mortality Database between 1st October 2023 and 30th September 2024, accounting for 3 per cent of the total number of child deaths during this period.
That’s an upwards trajectory nobody wants to see.
Ask me anything
“Part of the bill involves preventing agents and landlords from accepting offers over the advertised price. What do you think the likely immediate consequences of this are going to be?” they asked.
In the immediate aftermath of this bill becoming law, it’s possible that advertised rents will rise because landlords and agents are no longer allowed to encourage people to outbid each other for homes.
What the actual outcome will be, we shall have to see.
Send in your questions to: @Victoria_Spratt, on X, formerly Twitter, @vicky.spratt on Instagram or via email vicky.spratt@inews.co.uk.
Vicky’s pick
Love in Exile will be published by Penguin’s Allen Lane in February.
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