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Corbyn’s Labour will widen the mortgage and housing debate

by: Bob Hunt, chief executive of Paradigm Mortgage Services
  • 22/09/2015
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Corbyn’s Labour will widen the mortgage and housing debate
The industry can expect to hear a much more divisive political debate on housing and mortgages with the appointment of Jeremy Corbyn as Labour's party leader.

Whatever your political persuasion, one can’t help looking at the metamorphosis taking place within the Labour Party right now somewhat open-mouthed.

Just over four months ago on the night of the general election, Ed Miliband was apparently writing his victory speech, and now we have had something akin to a political earthquake whereby Miliband and most of Labour’s former big beasts have been wiped from the map by a political meteor called Jeremy Corbyn.

It still barely seems real and following Corbyn’s announcements confirming his shadow Cabinet – including some names that will be completely new even to the most ardent of Labour supporters – the sense of un-realness seems even more reinforced. Of perhaps most interest to those working within the housing and mortgage markets are the new shadow chancellor, John McDonnell, and the shadow minister for housing and planning, John Healey.

Both are names I would suggest are not widely known and one can sense they have a huge job on their hands when it comes to fighting battles against the Conservative government. We await to see the direction they will move in but in terms of housing, Corbyn’s August policy paper revealed a focus on building more homes – this time council houses, regional home building targets and a National Investment Bank to support housing projects.

Support for tenants

In the private rental sector, Corbyn’s focus appears to be not too dissimilar from what Miliband’s Labour were proposing during the election campaign – that is capping rents, landlord licensing, a focus on giving tenants a ownership share in their properties, and so forth. Lest we forget that this ‘Generation Rent’ thrust was a central tenet of the Labour campaign – one that was roundly rejected by the electorate and I would think by most housing and mortgage stakeholders.

However, for those who might already consider Corbyn’s Labour Party unelectable and therefore of little concern for the next five, possibly 10 years, there will undoubtedly be an impact. Let’s not kid ourselves that the party can’t have an influence on government policy.

Indeed, you might look at a number of policies announced by George Osborne in his July Budget and feel they are (admittedly watered down) variations of other party’s election priorities. Osborne himself has often said that he is not afraid of taking ideas from others. While I would not put this in the ‘good idea’ category, it’s possible to see the hands of many opposition parties all over the decision to cut higher rate tax relief on buy-to-let mortgage payments. It’s one example where the government appears to have been responding to the thrust of other parties and was no doubt supposed to allay some concern that landlords’ advantages were far outweighing those of homeowners.

So, while we await the policies of this new era of Corbyn’s Labour it seems sensible to consider that this move to the left could herald some radical changes, especially when compared to the Labour Party of the last 20 years. Telling the difference between the main parties should now be much easier and we therefore might anticipate a much more divisive debate on all housing and mortgage market matters in the months and years to come.

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