Warnings of half a million more sofa surfers as Labour holds emergency mortgage summit

More than half a million more people are set to become ‘sofa surfers’ because of the government’s planning changes, expert analysis reveals, as Labour prepares to meet mortgage brokers to discuss the worsening housing crisis.

According to housing consultancy Lichfields, there will be an increase of 580,000 ‘sofa surfers’ and concealed households by 2030 – a jump of 29 per cent - as a result of changes to the planning system made in December by Rishi Sunak after he caved to a backbench Tory rebellion.

Because of that move, planning applications have fallen to record lows and housebuilding in England is on track to reach its lowest level since the Second World War, further squeezing supply and pushing up costs.

‘Sofa surfers’ and concealed households are people that cannot afford their own housing and would otherwise be homeless if they weren’t staying with friends or relatives.

These figures come as Shadow Housing Secretary Lisa Nandy and Shadow Chancellor Rachel Reeves convene an emergency summit of mortgage brokers to hear more about the impact of the housing crisis on first-time buyers and homeowners.

The summit will include senior representatives from major mortgage brokers and financial advisors, including Mortgage Advice Bureau, Censeo Financial, and Quilter.

Labour has previously set out plans to ease the Tory mortgage crisis, with a set of mandatory measures.

These would be made compulsory by instructing the regulator to require all lenders to bring in measures such as allowing borrowers to switch to interest only mortgage payments for a temporary period, or to lengthen the term of their mortgage

period.

Labour has also pledged to reform the planning system and restore local housebuilding targets to build more homes, as well as introduce a comprehensive Renters’ Charter to make renting fairer, more secure and more affordable.

The Charter will include a ban on no-fault evictions, lengthening notice periods for landlords, making deposits more flexible, and a new code of practice for letting agents.

Separate analysis released at the weekend showed that the Tory failure on housebuilding is set to deal a £44 billion blow to the UK economy, with the state set to miss out on £16 billion in tax receipts because of the projected fall in housebuilding.

Lisa Nandy MP, Labour’s Shadow Housing Secretary, said:

“Across Britain, people are being hit hard by a Tory mortgage bombshell.

“Hundreds of thousands more households are at risk of being unable to afford a place to call home because the Prime Minister put appeasing his own MPs ahead of building the homes our country needs.

“While Rishi Sunak stands on the sidelines with his fingers in his ears, Labour has a plan to start fixing the housing crisis.

“We would stop households missing out on the mortgage support they need by making measures mandatory, we will give greater rights and protections to renters, and we will take the tough choices to get Britain building.”

Ends

Notes:

• Today (Wednesday 12 July), Rachel Reeves and Lisa Nandy will meet mortgage brokers to discuss the latest developments in the mortgage market and the worsening housing crisis. The summit will take place in Central London at 2.30pm, with senior representatives from groups including Mortgage Advice Bureau, Quilter, Barnsdale Financial Management, Censeo Financial, LDN Finance, Lifetime Connect, Mortgage Light, Orchard Financial Advisers, SimplyBiz Mortgages and The Finance Planning Group. 
  
  
• On latest official data on ‘sofa surfers’ and ‘concealed households’ from the English Housing Survey, there were around 2 million people sofa surfing or in concealed households. 
  
  

• On that data, 2% of households had someone living with them in the last 12 months who would otherwise be homeless (i.e. ‘sofa surfing’). In addition, 7% of households included someone who would like to buy or rent their own accommodation but can’t afford to. 
  
  
• Expert industry analysis of the government’s latest planning changes found it would lead to an extra 580,000 sofa surfers or concealed households, an increase of 29%. 
  
  

• Planning applications fall to record low after Rishi Sunak’s planning changes:https://www.theguardian.com/politics/2023/apr/01/planning-applications-in-england-fall-to-record-low-in-housing-blow. 
  
  
• Housebuilding in England is due to fall to its lowest level since the Second World War:https://www.theguardian.com/society/2023/feb/26/england-new-housing-housebuilding-planning-policy.

Labour’s housing plan:

• Keir Starmer has set out a comprehensive plan to target a homeownership rate of 70 per cent and 1.5 million new homeowners. 
  
  
• Labour will introduce a state-backed mortgage insurance scheme, with the state acting as guarantor for prospective homeowners who struggle to save for a large deposit. This will be modelled on similar successful schemes in other countries, such as Canada and Australia, where mortgage insurance increases the supply and reduces the cost of high loan-to-value (LTV) mortgages. 
  
  
• We will also ensure that first-time buyers can access homes that are built, by giving them first dibs on new developments in their area. We will also put an end to the practice of foreign buyers purchasing swathes of new housing developments off plan, before they are completed and have been marketed to local people. 
  
  
• Labour will reform the planning system to ensure more new homes can be built, with local people given a meaningful say on plans for development in their area. 
  
  
• We will also build more affordable and social homes as part of our plan to return social housing to the second largest form of tenure, as well as improving standards and strengthening tenants’ rights with a Renters’ Charter that will make renting fairer, more secure and more affordable.