Four ways Andy Burnham plans to fix the housing crisis

Good afternoon. What a year this week has been. Sorry, yes, it’s only Tuesday. Andy Burnham is now Prime Minister, and he has formed his Cabinet. Housing, as we learned in Burnham’s first speech, is front and centre of this new Labour government. In this week’s newsletter, I will share some thoughts on the big moves and what they might mean for housing and devolution: Angela Rayner’s return is met with enthusiasm in the housing sector and across English regions… Matthew Pennycook not only stays on as Housing and Planning Minister but gets a promotion – he will now attend Cabinet… And, finally, why John Healey is the first Chancellor Britain has had since Gordon Brown who understands housing properly… Rayner’s return as Secretary of State for Housing, Communities and Local Government is hardly unexpected and she was well regarded within local councils, homelessness organisations, housebuilding firms and housing associations. Shorts She was widely seen as someone who understood the complex issues impacting Britain’s housing market and was prepared to have, as she put it in a meeting, “a bit of argy bargy” to reach the right solutions. Here are four key housing and devolution policies that I believe may be announced under a Burnham government. 1. End rough sleeping Burnham has already announced his intention to end rough sleeping with a national Housing First policy based on the Finnish model (explainer here). Rayner will now oversee this and appoint a homelessness minister to grasp the brief. Rough sleeping is a complex policy area because it is caused by other factors and government departments, which include but are not limited to the fact that the Local Housing Allowance (LHA) is frozen (this is the Department for Work and Pensions’ problem) and the way that the Home Office kicks people out of asylum accommodation after their application has been approved or denied, regardless of whether they have somewhere to go. Burnham saw this up close in Manchester and he says it changed how he saw Westminster politics. I’ve written about the issue here. So, we can expect his Housing First policy to involve some serious intra-government working. This is a policy which also, in tandem, addresses the fact that Britain’s towns and cities do have more visible homelessness, which makes some people feel unsafe. If you hadn’t clocked that this policy is also aimed at taking the sting out of Reform UK, think again. 2. Build social and council housing We also know that Burnham would like a major social and council housebuilding drive. If that sounds familiar, it’s because this was also Angela Rayner’s pledge when she became Housing Secretary for the first time around in 2024. To that end, she managed to secure a record £39 bn worth of funding over ten years for the Social and Affordable Homes Programme (SAHP). Pennycook has been and will remain instrumental to the delivery of this. However, when Steve Reed took over from Rayner last autumn, as one source close to him put it to me, “we’re not doing any of that left council housebuilding nonsense now”. The direction was “Build Baby Build”, with emphasis on making life easier for major volume private housebuilders, who are struggling because house prices have stalled and building costs have risen with inflation. Rayner’s return and Burnham’s commitment to social and council housing signal that affordable housing models will be given priority focus in the weeks to come. Private builders are briefing that a diversion of funding away from SAHP towards local councils could “bankrupt them”. My understanding is that this is not the plan currently and that other funding models, such as giving strategic combined authorities their own Housing Revenue Accounts (which Burnham told me he favoured in 2024), are being looked at. 3. Devolve housing further It is no secret that Rayner wanted to go further on devolution during her first turn as Housing, Communities and Local Government Secretary. She pushed for councils to be given the right to introduce a local tourist tax, even when chancellor Rachel Reeves blocked the proposal. There is now a government consultation on giving regional mayors the power to introduce modest levies which would bring England in line with other European countries. If you’ve been to Paris or Naples recently, for instance, you’ll have paid a small ‘city tax’. That’s exactly what Rayner wanted. Just over a week ago, I listened to Rayner speak at the launch of a landmark review of her work on the English Devolution and Community Empowerment Act in government at King’s College London. At the event, Rayner made it clear that she thought the Treasury “had too much power”. Expect a more localised approach to housing under Rayner. In her first term at MHCLG, she began the process of decentralising Homes England to ensure that mayors had more access to funding. She also looked at tailored support for small and medium-sized builders who are often better placed than major volume national builders to deliver housing quickly in their local community. A clue as to what may be encouraged could be in an announcement from London Mayor Sadiq Khan last week. Khan is undoing Reed’s cut to the amount of affordable housing that developers have to deliver in the capital and, instead, introducing “granular” affordable housing delivery thresholds on a borough-by-borough basis. Applying such an approach nationally would fit with everything Burnham and Rayner have said so far. (Read my exclusive report on Khan’s announcement here.) 4. More state intervention in the housing market? Finally, what do Healey and Pennycook have in common other than the fact that they are both now in Burnham’s Cabinet? They both believe Britain’s housing market needs reform. Pennycook said this most explicitly when he sat down with me last December for my Radio 4 series Housing Britain, which you can listen back to here. As I’ve written at length, we have a problem which is particularly acute in London whereby house prices have soared to near-historic highs (even with recent real terms price falls) but earnings have not kept up. Recent inflation has squeezed builders’ margins by pushing up labour and materials costs. Our current model for delivering affordable housing relies on private builders to fund it via something called Section 106, but this is now sputtering. Pennycook has spoken about the need to reform Section 106 and the housing market more widely. The fact that John Healey is now in No 11 makes this even more likely. Firstly, Healey used to do Pennycook’s job. He was housing and planning minister at the end of Gordon Brown’s government in 2010. After that, he held the role of shadow housing secretary under Jeremy Corbyn and, in that time, I sat down with him for multiple interviews where he explained that he thought the housing market was in trouble because house prices had risen too far above earnings. I met with Healey’s team at the Ministry of Defence (MOD) shortly before he resigned over the Defence Investment Plan (DIP) to discuss MOD plans to build new housing for military families. This was regarded as a way to build housing while driving growth – proper “Keynesian economics”. There will be alignment between that idea and the agenda Rayner and Pennycook have worked together on, both in government and opposition. Pennycook has said he doesn’t think that major volume housebuilders are delivering enough volume and warned that high land prices have impacted house building. He used his Planning and Infrastructure Act to beef up public bodies’ powers to buy land more cheaply. Healey will also understand the need for a regionally specific approach to housebuilding and development which fits with Pennycook and Rayner’s new towns vision in particular. This is because Healey started as a private secretary to Gordon Brown when he was chancellor under Blair, and in that time he worked on Regional Development Agencies (RDAs). These were scrapped by the Coalition Government that took over in 2010, but Healey always maintained that RDAs were key to driving investment to the places that needed it most. Watch this space! Housing crisis watch This seems like a good time to revisit my recent Big Read about what happened under Reed and what needs to change as Burnham inherits what experts have told me is “the most dysfunctional housing market in decades”. Meanwhile, ITV News Investigations Editor Dan Hewitt has written for The i Paper on his experiences uncovering shocking conditions inside Britain’s rented homes. You can read his piece here. What I’ve been reading and watching Over the weekend, my boyfriend decided we should watch the satirical comedy Ladies First on Netflix with Rosamund Pike and Sacha Baron Cohen. It’s a riff on a 2018 French film called Je Ne Suis Pas Un Homme Facile. But, sadly, it is terrible, one long overwrought idea that, frankly, could have been a sketch about what might happen if the world were a matriarchy instead of a patriarchy. I would rather we’d watched yet more football. I am currently reading Lost Lambs by American author Madeleine Cash, whom I met recently when she was in London. Unlike the above film, it is very good.