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Matthew Pennycook: “The housing crisis is acute and entrenched”

At a New Statesman event, the housing minister addressed the challenges ahead for the Labour government's housebuilding agenda.

By Jon Bernstein

On a rainy late September morning, room 11b of Liverpool’s ACC conference centre was packed. Housing debates at Labour Party conference are invariably standing room-only affairs and this one was no different. Housing affects us all. Housing policy animates. It sometimes frustrates.

Opening the fringe debate, Kate Markey, chief executive of the Nationwide Foundation, pinpointed one of the main causes of that frustration. “No modern government has truly articulated a vision and a strategy of what housing is for,” she said. “As a consequence, we’ve had years and years of siloed policy which has brought unintended consequences.”

Unintended consequences that include poor quality homes (in 2021-22, 14 per cent of households lived in dwellings that fell below the Decent Homes Standard); an all-time high number of households living in temporary accommodation; and rising property prices that put home ownership beyond the aspirations of many.

Markey argued that housing needs to be viewed as a system, “a complicated web of economic and societal levers that impact each other”. Developing the theme, David Orr, former chief executive of the National Housing Federation and head of national housing coalition Homes for All, noted: “Housing doesn’t exist in isolation… [It] is core to our success as a nation, it is core to the economy, it is core to our social stability. We want our kids to do their best. How are they supposed to do that if they have nowhere to do their homework?

“If ever there was something that needed long-term thinking and strategic planning, it’s housing.”

On the need for a housing vision, Orr compared it to other parts of government delivery. “I know what the vision for the NHS is. It might be difficult to deliver, but I know we all have a vision of a health service that is available to all free at the point of use. I know what the vision is for our education service. I know what the vision is for our climate change policy, net zero by 2050. I don’t know what the vision for housing is.”

In response, the Housing and Planning Minister, Matthew Pennycook, described the housing crisis as “acute and entrenched”. Before detailing Labour’s intended solutions, he outlined some of the suffering that results from the present crisis. “There are more than a million people on social housing waiting lists. There are millions of people in insecure, often substandard private rented accommodation. There are millions of people in cold, damp and mouldy substandard properties.”

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“And most shocking… we now have a situation where – partly as a result of decades of not building enough homes of all tenures but largely as a result of policy decisions made over the last 14 years – 150,000 children [are] homeless in temporary accommodation. That should shame us as a nation.”

Two constituency MPs added some local detail. Meg Hillier, MP for Hackney South and Shoreditch since 2005, said half of her constituents live in poverty. Many teenagers share, not just a bedroom, but a bed with a parent. There is, she said, a “theoretical” 13-year wait for a two-bedroom property. Anything larger and the waiting time is “off the scale”.

Fellow Labour MP Satvir Kaur is newly elected, winning the seat of Southampton Test in July’s general election. In Southampton as a whole, there are 8,000 people on housing waiting lists. “Housing for too long has been a commodity,” she said. “A decent, safe, affordable home is intrinsically linked to better life outcomes.”

Defining what he called the “bold and decisive action” Labour has taken in the first few months of government, Pennycook cited forthcoming reform to the planning system to help meet the government’s target to deliver 1.5 million homes in the span of a five-year parliament. He cited too, a new Renters’ Rights Bill (“not a polished Renters (Reform) Bill”) as the first step in delivering a “huge increase” in affordable homes by giving new flexibility to councils and housing associations. He also promised action on “decency, standards and professionalisms” featuring a decent homes standard across the private and social rented sectors.

Referring to earlier remarks, he added: “This is a systems problem. We’ve got to change every aspect of it. This is not an a la carte menu. It’s a set menu. Everything must be done to transform the system.”

Hillier identified two interlinked issues that matter most to her constituents – supply and quality. On social housing, she observed: “Even if you are adequately housed… you still often face disrepair issues because of a lack of investment. That’s not an excuse – we cannot have modern slums from our social landlords.”

On the quality of house building, Orr added: “It’s an absolute waste of time and money building rubbish.” Homes with a span of 40-50 years are symptomatic of the larger problem afflicting the sector, he said. Kaur noted that much of Southampton’s postwar housing stock is now 20 years beyond its lifespan.

“The way you drive quality is through competition,” argued Markey. This includes community-led housing able to meet around 5 per cent of the government’s 1.5 million homes target. Pennycook added: “There’s no way we’ll build enough homes in this country without getting many more SMEs [small and medium-sized enterprises] involved… we are overly reliant on a handful of volume builders that have a particular business model.”

It has been suggested that ending Section 21 no-fault evictions will drive landlords away and reduce the availability of private rented properties. It’s a view that the panel challenged. “First of all, a home doesn’t vanish in a puff of smoke [with the end of no-fault evictions],” said Pennycook. “Someone might buy that home, the local authority might acquire that home, it might go to a more professional landlord. So those homes don’t disappear. Second, I don’t think there’s any evidence of an exodus of landlords. None of the statistics bear this out. So I take that with a pinch of salt.”

Markey pointed to Rent Better research that examined the long-term impacts of Scottish tenancy reform. Rather than exiting the rental market, what landlords really want is consistency and certainty.

And in the spirit of consistency and certainty, Hillier had a final plea. With reference to the more than a dozen ministers who have held the housing brief since 2010, she said: “If Keir Starmer is listening, Matthew Pennycook should stay in his role for five years, at least. It needs a steady hand on the tiller.”

“Homes for all: How can Labour shape the future of UK housing?”, a New Statesman panel discussion in association with Nationwide Foundation, took place in Liverpool on 23 September 2024

This article first appeared in our Spotlight Housing supplement, published on 29 November 2024.

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