In the days running up to May’s elections, I interviewed families in my south London borough – a council that Labour lost – to find out what was really on voters’ minds. One issue kept coming up.
People are furious about housing. This is not just a London problem. As a nation we are currently spending almost £3bn a year on emergency and temporary housing.
Insurgent council candidates for the Liberal Democrats and the Green Party had been preparing to campaign on the cost of living, Keir Starmer’s performance and on the rise of Reform. But when I spoke to them, voters only wanted to talk about housing, and the anger wasn’t confined to people in immediate crisis.
It included everyone from the frustrated parents of long-overstaying adult children who can’t afford to launch their own lives, to the private renters paying more than £1,000 a month for a single room. Anger about housing now crosses a wide social spectrum.
The housing crisis is both simple and complex. The core of the problem can be described in one sentence: for more than 30 years we have built too few homes and now we’re at a crunch point. But the policy solutions are a knot of what appear to be impossible ideas. And whatever levers politicians pull, the benefits still won’t be felt for at least a decade – even if the policies work, there’s every chance that another party will be the political beneficiary.
To be fair to Keir Starmer and his former deputy, Angela Rayner, Labour has acknowledged the problem, and done a lot to stimulate new building. After 16 housing ministers in just over a decade under the Tories, there is now a coherent policy on housing, and stability in the department. Labour promised 300,000 new homes for every year of its first term, and made immediate changes to get there.
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There has been record public investment in new social housing. The creation of a new National Housing Bank was intended to provide new financing to stimulate development, and planning reforms were introduced, to make securing land for new housing much easier. Social landlords have even managed to negotiate an overdue rent settlement, meaning new social homes can be built with some guarantee of their future rent income.
These changes have all been welcome, but this is the worst possible time to ramp up development, because there are huge challenges throughout the industry.
There is a labour shortage and a skills gap, which makes it hard to start laying the bricks. The rising cost of materials makes building each home more expensive, meaning higher risks for private house builders. Private finance is harder to come by because of the shock of the Middle East crisis and the faltering global economy.
These factors are contributing to the overall contraction of the housebuilding sector: many small businesses in the industry have collapsed or been swallowed by the big companies, leaving the government dependent on a handful of private firms to actually hit their targets.
“The government has been really active and relatively ambitious on housing, but whether or not there is any single measure at all that they could adopt in the short term that would rise to the level of the challenge is the problem,” explains Gavin Smart, chief executive of the Chartered Institute of Housing. “It’s like a ball of wool and you’ve got to pull at several threads to untangle it. That is a long-term problem.”
All this means that now, as the government enters a period of political self-immolation, Britain is way behind on its housing targets. Official figures show that 208,600 homes were built in England in the financial year 2024-25 – that’s less than were built the year before. Estimates provided by the fact-checking organisation Full Fact indicate that between July 2024 and March 2026, there was a net addition of 342,100 homes, just 22.8% of the total five-year target of 1.5m.
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What’s toughest for the government is that it can’t even focus its efforts on providing new social housing. In the last two decades, at least half of new social housing has been provided as part of a “Section 106” agreement, where private housebuilders are required to include a certain percentage of affordable housing on each new development. That makes the provision of affordable housing dependent on private developers – the government cannot directly affect it.
“In late 1990s into the early 2000s, the social housing sector was, in a lot of ways, counter-cyclical. It had the ability to do stuff when the rest of the market was stalled. But the sector is now much more pro-cyclical, so the success of delivering new social homes is highly dependent on what’s happening in the rest of the housing market,” says Smart. “In a way the whole system is predicated on growth, because if it doesn’t happen the system starts to clog up, and that’s an interesting example of the consequences of not seeing house-price growth while construction costs rise. You have to pay attention to what’s going on in the market.”
Has the government been doing that? There are some signs that it isn’t listening closely enough. One indicator is the way it appears to have kow-towed to pressure over its plans to abolish the leasehold system.
Leasehold is a form of homeownership where the holder of a lease retains a degree of ownership in the property, but does not have full ownership. For generations it was an odd, archaic part of the British housing system that functioned fairly comfortably. But now, a leasehold crisis has gathered pace since the Grenfell Tower tragedy and the Covid-19 pandemic.
After Grenfell, the British government rightly introduced strict safety standards to higher and medium-rise buildings, requiring expensive fire safety works by freeholders and causing insurance costs to rise. But many freeholders used this window of opportunity to crank up service charges.
At the same time, the pandemic and the requirement to work from home took the heat out of the market for small apartments without gardens. Many people who bought flats in the mid- or late-2010s have found themselves facing unaffordable mortgage and service charges, while their properties are actually decreasing in value.
Some who bought homes in the capital under the government’s Help to Buy scheme (which was later found to have inflated the market for everyone) are now in negative equity and unable to repay the government.
When prices for properties on the lowest rung of the market were rising, first-time buyers were willing to swallow rising costs. Now they are refusing to buy flats because of their leasehold – or “fleecehold” – agreements. Prices in this part of the market are still dropping.
Both the last Conservative government and today’s cabinet committed to delete leasehold entirely, moving towards a new system called “commonhold”. The government has said it will legislate to prevent new leasehold flats and homes being built, but has since stepped back from the gnarly detail (such as setting the rates at which leaseholders could buy out their freehold) that would be necessary to overhaul the whole system.
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“Labour used to attack the last government for cherry-picking and now they’re doing the same thing,” says Harry Scoffin, who leads the Free Leaseholders campaign. He is charting the devastating effect this small policy issue is having on the whole housing market.
“Developers are panicking because they can’t sell the flats and local authorities say they’re being crushed under mandatory housing targets, yet developers aren’t bringing sites forward because there’s no market for flats any more. John Lewis is moving out of big development in west London,” he explains.
“Taylor Wimpey has said it isn’t going to do any more flat development in London, and you’ve got the Berkeley Group putting out two years’ service-charge holidays, furniture packs and contributions to season tickets. They are doing everything except the one thing they could: give a share of freehold.”
These knots in the housing market exert disproportionate influence. You need to have mobility from top to bottom of the chain to keep everything moving, so a relatively small number of first-time buyers choosing not to purchase a leasehold flat means the second-steppers are stuck.
You see a similar issue at the top end of the market. Baby boomers with large amounts of equity in paid-off family homes are failing to free up larger homes for younger families to buy because they are not downsizing. That can be for a number of reasons: old age makes moving house difficult; others need the space to support adult children at home; and others have been scared off the idea of buying a retirement flat because of the complications and uncertainties of leasehold.
Scoffin believes that the government has succumbed to pressure from industry lobbyists over the leasehold question. He describes the forthcoming bill as “a shell of what was promised”.
Housing minister Matthew Pennycook says the government is still committed to commonhold, but the government may have underestimated the risks of appearing to side with the builders over buyers.
Even where it is improving life for renters and owners, it is facing a backlash. The Renters Rights Act granted private renters security and more control over homes in an unstable housing market. However, many are experiencing it as sudden eviction, as many individual landlords choose to leave the market rather than meet the new requirements of the law.
This is an unfortunate, necessary side-effect. Providing someone with a safe and secure home is a serious job, not the work of hobbyist speculators and accidental landlords. But that doesn’t make your average voter less frustrated.
At the Chartered Institute of Housing, Smart says the problem requires the government to focus very specifically on the areas over which it has more control. One of those is the development of new towns and urban extensions. This is happening, but could be accelerated.
“That was a significant feature of our housing supply system when we were building large numbers of homes, and the state owning the land, zoning the land and being active did help drive larger numbers,” he says. “Back then local authorities and government agencies played a leading role in commissioning and building new council housing, and that provided predictable demand and cash flow for the builders. That partnership approach is something the government has already shown interest in, and which has more potential.”
In Westminster, one of the criticisms of Keir Starmer’s leadership is that it has been so timid. There is a systemic failure in the housing sector, and much of it is out of any one minister’s control. But there has also been a lack of confidence in taking on the interests that are preventing homes being built more quickly, as the depth of the leasehold crisis demonstrates.
When quizzed on this, Pennycook has told journalists that the government does “want to be ambitious” and “we’re going as fast as we possibly can, balancing speed with care”.
That seems to be a mantra for the government’s entire housing project. What if the lack of speed is seen by voters as representing a lack of care? That’s what the doorstep knockers in Lambeth heard in early May. Along with the cost of food and the rising number of young people outside formal education or employment, it is the most tangible aspect of Britain’s economic decline in the mind of the average voter.
Housing is a core election issue – it’s just a problem that no politician can resolve in one term.
Hannah Fearn is a freelance writer and reporter specialising in social affairs
