Liberal Democrat Manifesto – BPF Analysis

While the polls suggest that the LibDems are unlikely to be a part of the next Government in any form, they are likely to significantly increase their political representation in parliament and so we should be aware of their policies.

The most relevant LibDem policies span two chapters in their manifesto, ‘14 - Housing’ & ‘15 – Communities and Local Government’. We set out our assessment of the relevant policies underneath each section.

Chapter 4, ‘Business and Jobs’, also commits the party to replacing business rates with a ‘Commercial Landowner Levy’. No further detail on this is in the manifesto, but it would be based on this 2018 report. The BPF does not support a move away from business rates, instead we argue that the system needs to be further reformed to enable annual revaluations, a lower overall multiplier, and reformed empty rates relief.

We also consider relevant proposals in the Climate Change, Energy and the Natural Environment chapters (5 and 12).

Housing

The party commits to:

• Increasing building of new homes to 380,000 a year across the UK, including 150,000 social homes a year, through new garden cities and community-led development of cities and towns.
• Delivering a fair deal for renters by immediately banning no-fault evictions, making three-year tenancies the default, and creating a national register of licensed landlords.
• Giving local authorities, including National Park Authorities, the powers to end Right to Buy in their areas.
• Ending rough sleeping within the next Parliament and immediately scrapping the archaic Vagrancy Act.
• Abolishing residential leaseholds and capping ground rents to a nominal fee, so that everyone has control over their property.

And in more detail:

• Expand Neighbourhood Planning across England.
• Build ten new garden cities.
• Allow councils to buy land for housing based on current use value rather than on a hope-value basis by reforming the Land Compensation Act 1961.
• Properly fund local planning departments to improve planning outcomes and ensure housing is not built in areas of high flood risk without adequate mitigation, by allowing local authorities to set their own fees.
• Encourage the use of rural exception sites to expand rural housing.
• Trial Community Land Auctions to ensure that local communities receive a fair share of the benefits of new development in their areas and to help fund vital local services.
• Encourage development of existing brownfield sites with financial incentives and ensuring that affordable and social housing is included in these projects.
• Introduce ‘use-it-or-lose-it’ planning permission for developers who refuse to build.
• Put the construction sector on a sustainable footing by investing in skills, training and new technologies such as modern methods of construction.
• Ensure that all development has appropriate infrastructure, services and amenities in place, integrating infrastructure and public service delivery into the planning process.
• Make homes warmer and cheaper to heat with a ten-year emergency upgrade programme, and ensure that all new homes are zero-carbon, as set out in chapter 5.
• Remove dangerous cladding from all buildings, while ensuring that leaseholders do not have to pay a penny towards it.
• Help people who cannot afford a deposit to own their own homes by introducing a new Rent to Own model for social housing where rent payments give tenants an increasing stake in the property, owning it outright after 30 years.
• End rough sleeping within the next Parliament by:
• Urgently publishing a cross-Whitehall plan to end all forms of homelessness.
• Exempting groups of homeless people, and those at risk of homelessness, from the Shared Accommodation Rate.
• Introducing a ‘somewhere safe to stay’ legal duty to ensure that everyone who is at risk of sleeping rough is provided with emergency accommodation and an assessment of their needs.
• Ensuring sufficient financial resources for local authorities to deliver the Homelessness Reduction Act and provide accommodation for survivors of domestic abuse.
• Give local authorities new powers to control second homes and short-term lets in their areas, as set out in chapter 15 [see below].
• Protect the rights of social renters by:
• Proactively enforcing clear standards for homes that are socially rented, including strict time limits for repairs.
• Fully recognising tenant panels so that renters have a voice in landlord governance.
  
  

BPF analysis

There are a lot of proposals in the manifesto, most notably in relation to housing supply. We support the recognition that there is a housing supply crisis. The target of building 150k social homes a year is one that we refer to as achievable in our manifesto, where we suggest that if Government put in £9-14bn a year into a social housing budget, pension funds could match that (with the right policy framework), delivering 145k social homes annually.

We support the move to ban no fault evictions and longer term tenancies, but still need the court system to be improved for this to be viable (as promised by the current Government). In regard to abolition of leasehold properties, as we said to the current Government, we would need to have a workable alternative to the current system. The transition to a new system would also need very careful thought, and whilst we would support legislative measures to tackle rapidly escalating ground rents, a broad-brush approach could be expensive with Government potentially having to compensate for the loss of legitimate property rights.

The BPF would oppose measures to reduce ‘hope value’ in CPO processes as these cut across legitimate property rights. Whilst we support the ability to acquire for housing and regeneration purposes, this should not be at the expense of property owners. We support the idea of incentives to develop on brownfield land – we call for measures to make it easier to develop such land in our manifesto. The delivery of affordable housing in those schemes would be subject to viability, unless the party is proposing a specific measure to override that viability assessment (if so, it does not reference what that would be).

We would also be content in principle with a ‘use-it-or-lose-it' expiry for planning permissions, subject to the detail. The commitment to remove cladding from all buildings without requiring leaseholders to pay for it suggests that there would be no height threshold, as currently applies. As such the BPF would not be likely to support it. We would note that some of the measures mentioned above are either already possible (such as expanding neighborhood planning and trialing Community Land Auctions) or have not been successful where they have already been tried (i.e. Rent-to-Own models). We would also need to see the detail of the proposal to ensure that development has supporting infrastructure in place, as this is theoretically what the current planning system is supposed to ensure.

Communities & Local Government

In this section, inter alia the party promises to:

• Tackle the funding crisis facing local authorities, including by providing multi-year settlements, boosting the supply of social housing, and forging a long-term, cross-party agreement on social care.
• Give communities more control over the number of second homes and short-term lets in their areas.
• Ensure local authorities have the powers and resources they need to tackle the climate and nature emergencies, as set out in chapters 5 and 12.
• Tackle the funding crisis facing local authorities, including by providing multi-year settlements, boosting the supply of social housing, and forging a long-term, cross-party agreement on social care.
• Give communities more control over the number of second homes and short-term lets in their areas.
• Ensure local authorities have the powers and resources they need to tackle the climate and nature emergencies, as set out in chapters 5 and 12.
• Ensure that gigabit broadband is available to every home and business, including in rural and remote communities, and support local bespoke solutions so that no property is left out.
• End the top-down reorganisation of councils and the imposition of elected mayors on communities who do not want them.

And also to:

• Decentralise decision-making from Whitehall and Westminster by inviting local areas to take control of the services that matter to them most.
• Give local authorities new powers to control second homes and short-term lets in their areas by: Allowing them to increase council tax by up to 500% where homes are being bought as second homes, with a stamp duty surcharge on overseas residents purchasing such properties.
• Creating a new planning class for these properties.
• Enhance powers over community assets to help local authorities protect pubs, community farms, and other vital infrastructure.
• Introduce a strategic Land and Sea Use Framework to effectively balance competing demands.

BPF analysis

We welcome the proposal to give more funding certainty to councils, which should enable them to plan better for regeneration and community investment, in turn creating more certainty for investors. Proposals to decentralise power to communities are welcome insofar as they enable greater ability to act and to fund investment, but we would be cautious about a system of local government that was so varied as to be hard for investors to navigate.

Climate Change, Energy and the Natural Environment

The Party remains committed to achieving net zero by 2045. They also state that they will set out a clear and stable roadmap to net zero.

On energy and emissions, the Party will:

• launch an emergency Home Energy Upgrade programme, with free insulation and heat pumps for low-income households;
• provide incentives for installing heat pumps;
• immediately require all new homes and non-domestic buildings to be built to a zero-carbon standard, including being fitted with solar panels;
• reintroduce requirements for landlords to upgrade the energy efficiency of their properties to EPC C or above by 2028; and
• decouple electricity prices from the wholesale gas price.
• On renewables, the Party will drive a rooftop solar revolution by expanding incentives for households to install solar panels, including a guaranteed fair price for electricity sold back into the grid.

The Party also commit to accelerate the deployment of renewable power by:

• building the grid infrastructure required; and
• reducing access costs for grid connections

On nature, the Party will:

• ensure that nature-based solutions form a critical part of the UK’s strategy to tackle climate change;
• ensure new developments result in significant net gain for biodiversity, with up to a 100% net gain for large developments;
• require large businesses to publish transition plans to become nature-positive; and
• introduce nature-related financial disclosure requirements for large businesses.

On accountability, the Party will also hold businesses to account for their role in tackling climate change by:

• introducing a general duty of care for the environment;
• requiring all large companies listed on UK stock exchanges to set net zero targets; and
• requiring pension funds and managers to show that their portfolio investments are consistent with the Paris Agreement.

BPF analysis

There are commitments here that we welcome and that reflect the BPF’s existing policy position.

The delivery of a net zero roadmap would provide the industry with some welcome certainty and investment in the grid and in grid connections will be critical to delivering all-electric buildings and to exploiting the renewable energy generation potential of the sector.

However, reintroducing the EPC C target for the domestic PRS will be challenging for some in the sector. We support higher standards but need realistic lead-in times.

We would seriously question the proposal to require up to 100% biodiversity net gain (BNG) for large developments. We need to understand how the current BNG requirements are impacting the market and impacting development before looking again at the mandatory minimum level.

We would also like to see more focus on commercial real estate and on actions to help decarbonise our commercial buildings.

 Costings

Note that the party costs the social housing policy as £6.2bn (including the cost of rolling out gigabit broadband) and the cost of the upgrade in home energy efficiency as £8.4bn, although this includes grid upgrades, renewable energy investment and biodiversity funding. It does not specify where this funding would come from.

BPF view in summary

It is good to see the Liberal Democrats support an ambitious housing target. In taking that target to another level, however, it is important that they harness the ability of emerging sectors such as Build-to-Rent and older people’s housing to bring forward new housing supply, and to enable faster build out rates, especially in development such as new towns, which the party explicitly commits to.

While proposals like more financial support for social housing and brownfield development align with the BPF’s own manifesto, ‘Building our Future’, we have concerns that politicians of all hues think that the abolition of leasehold, and of no fault evictions, will work simply at the stroke of a pen, when both require investment in workable alternatives.

Giving local councils certainty through long term funding settlements would be welcome in terms of being able to plan for regeneration investment, and particularly so if that long term certainty were extended to long term social housing rent settlements which would in turn unlock pension fund investment into new social homes, as we call for in our manifesto.

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